Repayment of directors loan account in different financial year

Accounting
1

I’m new to book keeping and have been learning as I go and I think I’ve made a mistake which I cant resolve (at least not how my head thinks I should resolve it).

I had several expenses owed back to me in a directors loan account for the financial year 1st December 14 – 30th November 15.I paid those expenses back in December 15 which is a new financial year. My directors loan account shows as overdrawn at the end of the November 15 which is also our financial year end (this was money owed back to me not money I owe the business).

My accountant told me that I should have paid this money back in November 15 before the year end.

The directors loan account being overdrawn does not affect my figures as I had more than enough money in the business to pay it back, It only seems to change how the figures would be presented.

From what I understand I can put a journal through to correct this, however it will mean my real bank account and Quickfile bank account will be out for November and December which could make it difficult to reconcile if I need to go back in several months time.

Does it matter that the business owed me money at the end of the financial year?

Do I have to show the repayment of the money in the same financial year or can I pay that money back at anytime?

Thanks

Darren

2

I can’t imagine why that would matter? Although I’m not an accountant, there is however a guide here on gov.uk that may prove to be useful.

As long as you have a clear schedule of any monies owed to you at your year-end that should be sufficient. I’m not aware of any rules that dictate that a loan must be settled at the year-end (particularly as it’s you lending money to the company). You do however need to declare any interest you charge the company (if applicable) on your personal tax return.

In terms of handling the DLA replayment in QF, you would typically see a debit on your main company account for the repayment. You would then tag this payment as a bank transfer to the DLA account, that should then balance the DLA back to zero.