When a director doesn’t take all their salary the balance is put into their loan account and is tagged to the curreent account. What is the repayment of the director’s loan tagged to?
That sounds backwards - if you’re declaring more salary than the director took then what you’d want to do is declare the whole net salary as having been paid from the DL bank account and the amount or amounts they actually took would be treated as transfers from the current account to DL. In the absence of any other DL transactions this would leave the DL bank account “overdrawn” by the amount of salary they have not taken, i.e. the amount the company owes them, and if/when they do take repayment that would similarly just be a bank transfer from current account to DL.
1 Like
In practical terms, when you run payroll you create a journal that allocates the wages and puts them into the DIR loan account ready for drawing out.
Then when you pay part of the wages that bank transaction is tagged as a transfer to the DIR loan account.
This is a simple PAYE Journal example
1 Like
Hi I’m new here and have just set quickfiles. I have recently set up my LTD company and in the process of imputing all my data for the last 12 months, and am stuck on how to log directors salary for my Directors loan account. I haven’t paid myself in the past 12 months as there was not enough money to pay myself. but would like to claim this back once the business is making money. Any suggestions or information for this situation ?
This topic was automatically closed 14 days after the last reply. New replies are no longer allowed.