Question asked by Duncan Mercer 10 years ago
Hi
Is it possible to claim expenses by paying with directors loan - i.e. I wouldn't actually get any physical money but my directors loan would reduce e.g.
DLA balance = £5000 Expense cliaim for mileage = £500
Pay expense with DLA so that :
DLA Balance = £4500 expense balance = 0
I assume if using Quick Pay with DLA the balance would go to £5500
Cheers Duncan
If you're already owed £5k via your DLA and pay a further £500 in expenses/mileage 'into' it the balance will be £5500 owing to you, not £4500. The loan will get bigger, not reduce. It would only reduce once you physically withdraw some of the money.
Best answerAs Chris says Duncan, that approach is more than acceptable and one many of my clients use.
However, i'm not sure why you think the DLA figures would sway £1000 as per your example unless i'm missing something?
Hi Duncan,
It is possible to do it this way and this would mean that it doesn't appear on your bank account as a transaction. However, what you would normally do is to transfer the money from the DLA into your main bank account and then pay it from there.
I hope that this helps,
Chris
Kevin - it's showing that by using the system the DLA balance would actually increase by £500 rather reduce by £500
If I transfer funds from DLA to Main Account the DLA would be debited again won't it? i.e. the amount the company owe me via the DLA increases not decrease.
I should have put the signs in :-
Current DLA balance = -£5000 (the company owes me £5000) Expense for mileage = £500 (the company owes me £500)
Target plan with no physical money moving anywhere :
DLA Balance = -£4500 (company owes me) Expense balance = £0 (as covered by just reducing the DLA owed by company to me)
I hope this makes it clearer?
Duncan
If you're already owed £5k via your DLA and pay a further £500 in expenses/mileage 'into' it the balance will be £5500 owing to you, not £4500. The loan will get bigger, not reduce. It would only reduce once you physically withdraw some of the money.
Best answerYep - I'm being an idiot, sorry
Not at all. Unless you're really comfortable with the ins and out of bookkeeping it's a difficult one to get your head around. I'm impressed you know as much as you do, most don't.
Needs must in any small business Kevin - if don't know it .... learn it and ask those in the the know.
Fingers crossed hard work paves the way for a bigger business down the line and the ability to employ the right people with the right skills.
Thanks for your help.
Nail/head with the learning comment. Even by posting on this community I'm learning on a daily basis.
Anyway, feel free to post & ask away if the needed arises, it's better than worrying about it or spending half a day on Google!!
Nail/head with the learning comment. Even by posting on this community I'm learning on a daily basis.
Anyway, feel free to post & ask away if the needed arises, it's better than worrying about it or spending half a day on Google!!
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