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  • Tax - Director's loan account write-off letter
    Director's loan account write-off letterAn overdrawn director's loan account can be cleared by the company if the directors or shareholders agree to write the loan off. However, it must get the paperwork right.Reporting requirementsWhere a director or shareholder's loan is written off, s.415 Income Tax (Trading and Other Income) Act 2005 says that it's taxed as income in the same way as a dividend. The director must report the write-off in their self-assessment personal tax return and the company notify the...
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  • Tax - Director's loan agreement
    Director's loan agreementA director shareholder doesn't have to sign a loan agreement when they borrow money from their company. The terms of borrowing can be agreed orally or just implied. However, in certain situations a director is required by company law to obtain permission from the shareholders prior to borrowing company money. Get it in writingShareholder approval (generally by ordinary resolution) is only required for directors' loans in excess of £10,000 (the limit is £50,000 if the loan is to meet...
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