directors loan account

[Natalie123]

Hi everybody, i wanted to know, if a limited company pay £5k to a director in a business and at the year end, assuming there is profit after tax of £20k, will the accountant deduct this loan amount from the profit or does this sit in the balance sheet as Directors loan.

 

[elaine@cheapaccounting]

It is nothing to do with the P&L - just a balance sheet item

 

[BCR Insolvency]

It depends what the £5,000 is - is it a loan, a repayment of an in credit loan account, a bonus or a dividend.

If the latter 2 it's a P+L item, the last one being post tax, with the other pre. If it's one of the first 2 then it avoids the P+L altogether.

Your accountant will advise you which is best.

Regards

Kevin Lucas

 

[MyAccountantOnline]

Hi everybody, i wanted to know, if a limited company pay £5k to a director in a business and at the year end, assuming there is profit after tax of £20k, will the accountant deduct this loan amount from the profit or does this sit in the balance sheet as Directors loan.

Some accountants will transfer dividends to clear a directors loan account at the year end but its not the way I like to work.

I encourage clients to prepare or have prepared management accounts so that they can see what level of profits have been made and pay dividends accordingly.

 

[elaine@cheapaccounting]

I encourage clients to prepare or have prepared management accounts so that they can see what level of profits have been made and pay dividends accordingly.

Our fee on line system produces mang accounts plus a dividend projection

 

[MyAccountantOnline]

Our fee on line system produces mang accounts plus a dividend projection

Same as us

 

[elaine@cheapaccounting]

Same as us

Wow - didn’t realise you have got a free on line system now Nicola. Great stuff. Good to see others joining the on line revolution.

What do you use?

 

[MyAccountantOnline]

Wow - didn’t realise you have got a free on line system now Nicola. Great stuff. Good to see others joining the on line revolution.

What do you use?

We dont insist clients use any package - it depends on the clients exact requirements.

 

[David Griffiths]

Wow - didn’t realise you have got a free on line system now Nicola. Great stuff. Good to see others joining the on line revolution.

All change. Nicola's gone free . . .

Our fee on line system produces mang accounts plus a dividend projection

. . . . and Elaine's gone fee!

 

[elaine@cheapaccounting]

All change. Nicola's gone free . . .




. . . . and Elaine's gone fee!

Mr On the Ball today

Well done you