Director Loans

[Travelling Sam]

Please help! This is one query that needs to be tied up - fortunately I am now investigating London based travel specialist accountants!

Where a limited company utilises a personal loan to pay for start-up costs, how can this be redirected from the business account without counting as salary.

i.e. The Personal Loan comes out of director's private bank account to the loan company, so repayments needs to go from Business Account to Personal Account without appearing as 'salary' and attracting taxation of any sort.

[Kent Accountant]

Please help! This is one query that needs to be tied up - fortunately I am now investigating London based travel specialist accountants!

Where a limited company utilises a personal loan to pay for start-up costs, how can this be redirected from the business account without counting as salary.

i.e. The Personal Loan comes out of director's private bank account to the loan company, so repayments needs to go from Business Account to Personal Account without appearing as 'salary' and attracting taxation of any sort.
Double Entry Bookkeeping
Dr: Formation Costs
Cr: Director's Loan

i.e. anything you have paid out personally gets charged to the company and credited to the loan

When you make the repayments
Dr: Director's Loan
Cr: Bank Account (it's actually a debit but that's double entry bookkeeping for you !! )

i.e. the amount you reimburse is deducted from your director's loan

Don't forget that you can also charge the company interest on your director's loan which will be tax deductible for the company but can offset the interest that you pay against the interest you receive from your company. The company will have to deduct 20% tax which you can reclaim dependent upon your total income

[Travelling Sam]

Thank you Bob.

Crucially I understand that it is possible. Now I need to find an accountant to do it for me!

Sam