I need to do an analysis of a Ltd company directors loan account which started when the director of the company transferred personal assets over to the company. What do I need to offset against this i.e. credit card transactions for personal use via business credit card, drawings not part of paye and vice versa Expenses paid by director from own funds.
Would setting this out as a t account with debit and credit transactions. And is there anything else I need to consider?
Yes you can create a T ACCOUNT . With the Assets bought into the Company by the Directors which were Personal Assets. Can you match the payment exactly to the Asset if so post this to your T Account to clear the balance. Directors are not subject to drawings as they are not Sole Trader or partnership status. Any expenses paid for personel expenses from the business for the Director post to the DIRECTORS LOAN ACCOUNT. Their ACCOUNTANT WILL SORT OUT THE Directors loan Account at their Financial Year End.
Yes can withdraw from Directors Loan account free of tax until balance is nil (because the director has already likely paid tax on the money that he introduced to the company) Directors have to be careful that they don't allow overdrawn Directors Loan Account ie taking more out of company then they put in.
