Apologies if this is a daft question ! On occasion to keep our shop afloat my wife and myself have had to use private money to cover bills etc. Can I treat this as a loan to the company ? Presumably I have to set up a directors loan account? My other concern was on the spreadsheet I use 'other income' seems to inflate sales, which is clearly incorrect. Appreciate any advice. Thanks
the way that I deal with this kind of entry is to : credit (increase) a director's loan account, and debit (increase) the expenses accounts
that way later when the company has sufficient cash you can withdraw it safely without having to declare a dividend
you could also pay yourself interest on the loan as an expense to the company - but this would have to be declared as income on your own personal tax return
Hi Gemma Many thanks for the advice. I shall endeavour to amend the spreadsheet I've been using. Interesting thought charging interest, I hadn't thought of that. Best wishes Mike
When you receive interest from your company it is likely to be taxable. Check with your accountant first.
I treat myself as a bank account, paying expenses, then transferring money from the main bank account to me the bank account to clear me back up to zero each month.
I can't comment on the "other income" bit as I can't see exactly how your spreadsheet is working without looking at it unfortunately. Maybe check the addition formulae?
Many thanks for the advice. I'll probably not worry about the interest. The spreadsheet was from DIY accounting. I'll have another look at links etc. Appreciate the help, there may be a few more panic messages as it's our first year end in a week! M
