Director’s loan account tax legislation is something that
you really do need to know about.
The cost and repayment processes for director’s loan accounts can be bewilderingly complex. Whereas taking money from a sole trader or partnership business carries only straightforward tax implications, withdrawing money from a company can open up a complicated financial and legal can of worms.
If you cannot afford to repay or offset an overdrawn director’s loan account within nine months of your company’s year-end you must act quickly to avoid losing control of your business.
We can organise for you to be guided through this step by step – and the earlier you address your situation the more options you have.
Overdrawn director’s loans are particularly complicated if your company is in danger of becoming insolvent.
You are considered to be overdrawn as soon as you have taken more money – that cannot be classed as a dividend or salary – out of your business than you have put in.
Liquidators will almost certainly pursue this amount as a company asset, unless you are able to either ‘write off’ the amount or leverage your situation to avoid having to repay it.
Our licensed insolvency practitioners can make sure you understand and explore all your options – but first it is essential we understand both the exact circumstances that you and your company face.
Speak to us today in confidence.
We will do everything possible to remove immediate stresses, minimise future implications and help you rescue your business.
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