s455 Director Loan Account

JoJoAccountant

Queries around the actual claim

1. s455 tax is due if the DLA owes more than £10,000 at 9 months after period end. But if the DLA is -£15,000 and £10,000 is allowable, then is it the difference that is marked up as the loan outstanding? So in this case £5,000. Or does one state that the loan is the whole amount of £15,000?
   
2. I am slightly confused by the repayment of the loan when the corporation tax is recovered. Let's say the DLA then becomes
   minus £9000 in total, which remains within the allowable amount. Does that CT then remain outstanding until the full amount is paid back?
   
3. My question is specifically how much of the loan is marked up in the CT600A? £15,000 or £5,000?
   
4. When the loan is paid back, does the full amount of the loan have to be paid back to recover all of the CT or can it be brought back to under £10K? What happens to the balance?
   
5. I have looked and looked in various places and can't find a definitive answer.
   
6. Thanks in advance if you have taken the time to look at this.
   

douglasstroud

s455 tax is due on any amount if the DLA is overdrawn not above 10k

JoJoAccountant

thanks - so does that mean that ALL of the loan must be paid back before the s455 corp tax is to be refunded? That is the bit that is confusing me!

douglasstroud

They need to pay back the 15k they have been charged s455 tax on (not just 5k) to reclaim the tax, they should receive this after the tax period in which it is paid back

JoJoAccountant

Ok - thanks. Harsh! Very helpful indeed - thank you.

douglasstroud

Not harsh at all really as it it is not the Directors money,
Also don’t forget as above 10k, interest needs to be charged and it will also be a BIK

JoJoAccountant

Yes - thanks. Got the BIK licked. We will likely charge interest on the loan. Thanks again.