Short Directors Loan

JodieR

Director borrowed £6k from his company for 2 weeks during the year. This was the only time throughout the year that his DLA was overdrawn. I'm pretty sure that there is nothing to declare on the Corp tax return but do I need to include it in a note in the accounts? And considering he has no other need to complete a P11D for 2011/12 would it be more sensible for him to pay the company interest for the loan instead of declaring it as an interest free loan on a P11D?

jamesm96

JodieR wrote: »

Director borrowed £6k from his company for 2 weeks during the year. This was the only time throughout the year that his DLA was overdrawn. I'm pretty sure that there is nothing to declare on the Corp tax return but do I need to include it in a note in the accounts? And considering he has no other need to complete a P11D for 2011/12 would it be more sensible for him to pay the company interest for the loan instead of declaring it as an interest free loan on a P11D?

I'd say paying the interest at HMRC's rate (currently 3% I think) should reduce any benefit charge, though I think I'm right in saying that he'd still, technically, need a P11D, it's just that the benefit would be shown as £nil. I've never heard of HMRC making a fuss for P11Ds not submitted where the benefit value was £nil, though.

If the loan account wasn't overdrawn at year-end (or if it was but was repaid within 9 months of the year-end) then am I also right in thinking you'd need to complete CT600A to show the amount of the overdrawn balance and also the repayment thereof?

Monsoon

I had one of these yesterday!

I had him pay the interest for the 1 month he had the loan, disclosed it in a note to the accounts, and no, there is no place for it on the CT600A. The only time you complete that is if there was a balance o/s at the year end (whether paid back after year end or not). If it's paid back in-year then it doesn't hit the CT return.

JodieR

Thanks muchly!