I have a small Ltd company and currently a Director’s Loan Account credit balance of ~£5k (company owes me).
I’ve now started taking a director salary via PAYE, processed in BrightPay. I don’t need to withdraw the cash, so I’ve set things up so that the net salary is posted to the Director’s Loan Account rather than paid to my bank.
This results in the DLA balance increasing (company owes me more), with no bank movement.
That sounds correct to me - the company is paying your salary using money that you have lent it as a director’s loan, so it should increase the liability.
If/when you do take any of the loan back you’d simply tag the money out from the company current account as a bank transfer to the director’s loan account, which will reduce the liability accordingly.
Hello, yes this is standard practice. You can then withdraw funds from your Director’s Loan Account (DLA) at any time without paying any more tax. However, just ensure that you never take more funds than you are owed i.e. ensure that the DLA doesn’t become a debit balance.