Sarah Bradford explains the tax consequences for both the director and the company when a director has a loan from the company.
In a personal or family company, transactions between the director and the company are commonplace. The director’s account is simply the mechanism for recoding the transactions.
Examples of transactions that may be found on a director’s loan account include:
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a loan by the director to the company;
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a loan from the company to the director;
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salary payments credited to the account;
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dividend payments credited to the account;
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bonus payments credited to the account;
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personal bills paid by the company on the director’s behalf;;
