Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Fri, 14 Jun 2024 12:50:47 GMT by HTRP
Hi, Please help with my query about allocation of made good amounts. I am a company director, the company pays for the following, all of which go into my DLA. (not actual amounts just examples) Opening Balance £40 overdrawn 10/04/23 - Bank - Accountancy fees £300 15/05/23 - Credit Card - Food shopping £600 17/05/23 - Bank - Cash £20 28/05/23 - Credit Card Food shopping £90 30/07/23 - Credit Card - Downloaded Music £100 26/09/23 - Bank - Cash £80 B/Fwd = £40 Cash borrowed £100 Section B = £300 Section C = £790 In the year I repay 18/04/23 - £150 31/10/23 - £200 How do I allocate the £350 made good to be reported on the P11d form? is it simply allocate to the oldest item first? or as a percentage of each category? Or do I not report any of this as it's gone into the DLA and I will repay at some point in the following year? Thank you for your help
Posted Fri, 21 Jun 2024 12:09:42 GMT by HMRC Admin 13
Hi HTRP For the accounting of "made good" on a benefit in kind, the director will need to say what item they are making good on. The outstanding items can then be processed via the payroll or on a P11D as needed. The DLA is not a bank account and should not be run like the directors personal current account. The DLA - An overdrawn director’s loan account is where the director has taken money out of the company that is not classed as a dividend or salary and the figure exceeds any money he/she has put into the company. At this point, the director will be deemed to be benefitting from a director’s loan. If the loan exceeds £10,000 at any time in the year then a benefit in kind has to be calculated on the director’s form P11D. If the loan is written off it is subject to NIC, through payroll. The director should include this amount in his SA return and it will be treated as a deemed dividend. It is not reported on P11d – as we would do for a normal beneficial loan that has been written off. If you are unsure whether you should treat the loan as earnings or a beneficial loan, you would need to speak to our Corporation Tax Helpline on 0300 200 3410 Thank you

You must be signed in to post in this forum.