I am just posting some transactions for a client and he has paid himself some money ie wages/drawings. He is not on PAYE so presume it will be self assessment. He draws very little money. Where do I post this to? I already have some postings to directors salaries for the other director. Can this be posted to the same code 7001 and just put their individual names against the drawings in the journal?
If he is a director and has drawn money from the business and he is not on PAYE then it should be posted as a debit to his Director's Loan account. Are there other directors on PAYE? Hence the posting to Directors' salaries?
Yes there is one other director but not on PAYE. Should I have a loan account for each director or both posted to one but with narrative to separate them?
I will move what I have already posted to directors salaries across to the loan account.
Yes, it would normally be better to have separate loan accounts for each director. This is partly to avoid any arguments in the future about how much the company owes each director but also because you may have the situation where one director's loan account is in credit but the other director's loan account is overdrawn. That fact might be overlooked if the two loan accounts were combined on Sage.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
Yes, exactly what Robert said. I would have a separate loan account for each director to avoid arguments Usually the gross wages/salaries nominals are only used for employees on PAYE.
Usually the gross wages/salaries nominals are only used for employees on PAYE.
