Director's Loan Account

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stphnstevey

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Sep 2, 2008
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  • #1
    I am just keeping a Profit and Loss Sheet only as I am a contractor and my accounts are fairly simple (one invoice and one salary and expenses per month).

    I want to show the Director's Loan Account, as I have put some money into the company. But I don't want that mixed up with other taxable income. Where would I show it in the P+L? Or if you don't normally show it in the P+L, is there a simple workaround?

    I simply don't want it included with taxable income, particularly when calculating dividends
     
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    KM-Tiger

    Free Member
    Aug 10, 2003
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  • #3
    stphnstevey said:
    ..... as I have put some money into the company.
    Click to expand...

    If you have put anything else into the company then its value can also appear in the Director's Loan account. Equipment or stock perhaps.

    DLA's are one of the few free lunches in taxation, as you can draw the money back free of tax, cashflow permitting. So the bigger its value the better.
     
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    stphnstevey

    Free Member
    Sep 2, 2008
    241
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  • #4
    Thanks. For your smaller clients that might be keeping their own books and not quite understand how to keep a Balance Sheet, what would you advise on noting the Director's Loan Account or would you just show them how to keep a Balance Sheet?

    Hope you don't mind me asking a similiar question, but where would the income from new allotment of shares be shown?
     
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    dp0848

    dp0848

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    May 14, 2008
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  • #5
    For money from the sale of new share:

    Dr Bank

    Cr Share capital

    My approach is to teach them how to keep a balance sheet. We act for a number of contractors and as you say the accounts are very simple as is the keeping of a balance sheet. We offer our clients a free helpline so if they get stuck they just pick up the phone or drop us an email.

    David.
     
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