Sam Hart looks at the tax implications and timing issues with directors loan accounts.
Many owner-managed businesses will have a director’s loan account (DLA) on their balance sheet. For advisers who work with entrepreneurial clients, it is important to understand how these balances arise, how they can be cleared and how the various tax charges operate when they are not.
In simple terms, a DLA records the financial position between the company and its director, who is often (but not always) also a shareholder. Often, a director may take regular sums throughout
