How come my directors loan is showing in a suspense account in P&L and thus is profit before tax?
Hi @jacques993
The Director’s Loan shouldn’t be showing in your suspense account (9998) as it’s treated as a separate nominal (1202).
However, as part of double-entry bookkeeping, what may be showing is if the entry in the bank account is untagged. You would simply need to tag it to remove it from 9998.
Please let me know if you need further help with this, or if you’re still unsure, I’m happy to take a quick look for you
Not really sure of what to tag it as, It would be great if you could take a look?
@QFMathew How do I go about sharing with you? Thanks
It would depend on what happened to the money, but I’ll run through a quick guide.
The Director’s Loan Account (DLA) is often used to track what a company owes to it’s director(s). So if I’m a director of Company A Ltd., and I lent them £1,000 by paying it into their current account, then this would be shown in the DLA like this:
This puts the DLA into a negative balance of £1,000 (pink arrow) which means the company is now ‘overdrawn’ with the director and will need to repay this.
To show the money coming into the business, this is then tagged as a transfer to the current account:
And then
That transaction is then tagged, and removed from 9998 Suspense Account. It will also create a corresponding entry in the Current account to show this money coming into the business:
In some cases, the director may pay for an outstanding invoice directly, in which case you would tag it to an invoice as normal. This will still show that the company owes the director the money, and it will appear on the balance sheet as a liability too:
Hope that helps 
@QFMathew Thats perfect and has really helped, So if there is no commitment to be paying the “loan” back I would just leave it without the last step as I have no plan to pay me back from the business
Generally speaking, the DLA will always need to be paid back to the director, otherwise you become liable for tax.
However, I’m not an accountant nor tax advisor, so you may better off speaking to one to ensure it’s entered and accounted for correctly.
Can I also just clarify that the money has been put into the business rather than taken out?
If the money is put into the business by the director, it’s a money out transaction in the DLA. If the money has been taken out of the business by the director, it’s a money in transaction in the DLA. Hope that makes sense?
@QFMathew Money has been put IN to the business
So in that case the above would stand.
You would have a money out transaction in the DLA, and a money in transaction in the Current Account.
But, if the loan doesn’t need to be repaid, there may be tax due on it. As I said, I’m not an accountant so you may wish to speak to one to verify this and ensure it’s all entered correctly. If you don’t have an accountant, you can either wait (there are a few active on the forums who may be able to help), or you can contact a panel of accountants from your dashboard:
@QFMathew So what I have done is correct, transfering from DLA to Current account?
Looking at your account, you have the money coming into your DLA, whereas it should be out.
With the current setup, you’re showing that the director owes the company money (e.g. the director has taken money out of the company rather than putting it in)
So How would I go about changing this? Sorry @QFMathew
Should 1000 be shown in the directors Loan account as Money Out?
If the 1000 is being given to the company from the director - yes.
So to correct this, you would need to delete the original transaction and re-input it as a money out in the DLA.
That will then show the DLA with a balance of -1000.00, which in essence means it’s “overdrawn”, and the company would need to pay it back
@QFMathew Okay awesome, and then tag still to the current account?
That’s Correct :). So then that will create a second transaction to show the money coming into the current account too
@QFMathew Brill thats everything done! Thanks, When it comes to filling in my Micro Entity Balance Sheet, Under what heading would I put the £1,200 DLA?
Creditors: amounts falling due after more than one year
Current: Provisions for liabilities
Current: Accruals and deferred income