A director's loan is defined as money taken from your company that isn't either of the following:
- A salary, dividend or expense treatment
- Money that you've previously paid into or loaned the company
A Director's Loan Account (DLA) is a record of all transactions between the company and its directors. It records not just the money owed by the directors, but also the money owed to them.
Director's loans can be used:
- when you need to access money in your company-apart from what you take out as a salary, dividend or expense treatment-for personal reasons.
- for a variety of purposes, such as covering the costs of a home repair bill, travel plans or any unforeseen personal expenses that may arise.
<p>A <a href="https://www.goforma.com/small-business-accounting/what-is-directors-loan-account" target="_blank"><strong>director's loan</strong></a> is defined as money taken from your company that isn't either of the following:</p><ul><li>A salary, dividend or expense treatment</li><li>Money that you've previously paid into or loaned the company<br></li></ul><p>A <strong>Director's Loan Account</strong> (DLA) is a record of all transactions between the company and its directors. It records not just the money owed by the directors, but also the money owed to them.<br></p><p><strong>Director's loans can be used</strong>:</p><ul><li>when you need to access money in your company-apart from what you take out as a salary, dividend or expense treatment-for personal reasons.</li><li>for a variety of purposes, such as covering the costs of a home repair bill, travel plans or any unforeseen personal expenses that may arise. </li></ul>
Our small business accounting guide walks through absolutely everything you need to know if you're considering starting a limited company. From different taxes, limited company advantages/ disadvantages, how to pay yourself, and what your key filing requirements are.
- When to register a Ltd company
- When to register for VAT
- How to take money out of your company
- Dividend tax rates
- Limited company expenses & corporation tax
- Annual accounts and deadlines
Read more of our Small Business Accounting guides:
Book a free accounting consultation to learn more about directors loans.
Our small business accounting guide walks through absolutely everything you need to know if you're considering starting a limited company. From different taxes, limited company advantages/ disadvantages, how to pay yourself, and what your key filing requirements are.
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