Alan Pink looks at possible ways of staying out of trouble with HMRC in certain circumstances when it comes to director’s loan accounts.
In any tax investigation involving a limited company, HMRC tends to ask to see copies of the director’s loan accounts because these tend to be ‘rich pickings’ for them in raising extra tax.
I’ll be looking at three different types of issue that tend to arise in the course of such HMRC investigations and drawing conclusions on how problems of these types can be avoided.
Overdrawn loan accounts
The most obvious problem, of course, is where the loan account is in debit, for example the director owes money back to the company. This triggers a tax charge under CTA 2010, s 455 if the overdrawn loan balance is still there nine
