Can Director Business Loan be added yearly?

[Deleted member 25779]

Hello,

I am running a small company from home and have loaned a certain amount of cash to the company the last 3 years. This month I am going to get my first salary out of the company and would like to know if I am allowed to do this:

Instead of taking £1500 each month.

I would like to take £1000 + £500 back from Director, therefore declare only £1000.

Would this be fine?

It is my understanding that a director loan cannot be declared as an income at the end of the year.

Thank you for your help,

Ben

 

[john1989]

If you have had no other income, you’ve potentially wasted your personal allowance.


Yes you can pay yourself a salary, which is taxable income and draw down from your DLA credit balance with no tax consequences.


For clarity, I would make two transfers from you bank account and clearly mark them as ‘salary’ and ‘DLA’.

 

[TimCaprica]

Hello,

You are right in that you can do this a loan repayment will not have any tax consequences.

What I would do is make sure you pay the £1,000 and £500 in seperate payments that way it is really clear the £1,000 is salary and the £500 is a loan repayment.

Even better though I would suggest you limit your salary to £883.33 per month. You can see why here:-

http://learn.capricaonline.co.uk/op...mall-business-owner-managers-and-contractors/

 

[john1989]

Even better though I would suggest you limit your salary to £883.33 per month. You can see why here:-

I would suggest that £883.33 per month could be the least tax efficient amount at this moment in time.

 

[TimCaprica]

Why's that? I didn't mention catchup for the months not paid this tax year but are you thinking of something else?

 

[john1989]

If it's the OP's only source of income, paying £883.33 per month would be wasting some of the personal allowance.

If the OP has had other income in the year, part of the personal allowance would already be utilised, so the more efficient amount may be much less that £883.33 per month.

 

[TimCaprica]

I see. Plenty of IFs there. I think the link I sent covers that.

 

[Deleted member 25779]

Hello,

Thank to all your replies, I really appreciate. When you speak about allowances you mean director allowances I presume, any more info on this please as I am not sure how allowances are calculated.
Can I use my private car, get part of the petrol, internet, computer repairs cost partly covered with allowances?

Thank you,

Ben

 

[john1989]

We are referring to your personal allowance. The allowance you can earn personally for this tax year without paying tax is £10,600

Has your accountant not helped with your personal tax planning?

 

[Deleted member 25779]

Hello,

Ok I understand, thank you. About the account, I went to see one last year but at that time I was not taking a wage. Will work it out no worry
My main focus at the moment is about director expenses, what I can and cannot claim as I have an office + work from home half half. I have food, electricity(4 big computers on), internet and phone expenses in both places and I cannot work out if I can bill the company for my private home work related expenses.

Thank you,

Ben

 

[john1989]

This may help
http://www.companybug.com/home-office-expenses-limited-company/

Food will almost certainly not be allowed.

 

[Energise Accounting]

I think you should be seeking the advice of an accountant who will have time to go through everything with you and will be able to look at your circumstances personally.