Sarah Bradford explains what to do if you get a letter from HMRC about a director’s loan which has been waived or released.
HMRC has recently written to individuals who, between 6 April 2019 and 5 April 2023, received a director’s loan that has been released or written off and who may not have declared the amount written off as income on their self-assessment tax return. The letter explains what action you might need to take.
Overdrawn ‘directors’ loan accounts’
Directors of personal and family companies may borrow money from the company. They may also owe the company money if the company pays meets personal items of expenditure. Where the company is a close company (as personal companies and most family companies are) there are consequences for the company and if the director’s account remains overdrawn at the corporation tax due date of nine
