Posted 09/07/2018 by Amy Patterson
How to pay an overdrawn Director’s Loan Account
Whoops…you have got an overdrawn Director’s Loan Account!
Here is how to pay it…
There are two ways to clear an overdrawn Director’s Loan Account:
Often Directors will not physically take the salary that is declared for them. This is also a way to reduce an overdrawn Director’s Loan. This is because the Director is owed a salary by the company but has not physically taken it. The money you are owed in salary by the company is then taken off the money that you owe the company.
WARNING! If a Director’s Loan balance is more than £10,000 overdrawn, a P11d benefit is reportable at an interest rate specified by the Government.
A P11d is a form of National Insurance due on benefits given to company employees. These can include private medical insurance and cars provided to employees which are paid for by the company. For more information on other items that attract P11d benefits please consult the .gov website.
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