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directors loans

(8 Posts)
Collaborate Thu 21-Mar-13 15:36:08

My usderstanding about such arrangements is that the employee/director will pay tax on the income eben though it is not immediately received. Did that happen to you OP?

pepperrabbit Thu 21-Mar-13 14:59:10

So you didn't put hard cash in, you are looking for a full lump sum withdrawal of deferred income?
Well it is definitely described as a "loan" so is neither income nor capital, and the fact that you received a repayment a few years ago could set a precedent.
I'm not too strong on the tax implications, and am unclear how a policy of deferring income and then being able to withdraw it tax free works - but whatever they decide/agree for you will then have to be fairly implemented across the rest of the directors - or holders of "shareholders loans"
I would check with the accountant if you do not have formal loan documentation to rely on.

not2tall Wed 20-Mar-13 20:43:33

yes I do have very recent evidence of the loan ... rather puzzlingly, in the audited accounts it is described as "shareholders loans" although we were a company limited by guarantee. The money was not loaned as a one-off sum; rather it was accrued by paying ourselves lower wages at times of higher income. the idea as it was explained to me at the time was that this would be paid off in (non-taxable) lump sums. We received one such payment a couple of years ago. The specific section in our articles which is referred to in their refusal to repay is below. Thanks loads for your responses.

The income and capital of the organisation shall be applied solely towards the promotion of the objects of the organisation; and no part of the income or capital shall be paid or transferred, directly or indirectly, to the members of the organisation, whether by way of dividends or bonus or otherwise in the form of profit.

Jacksterbear Wed 20-Mar-13 19:51:57

Oops meant neither income nor capital. Yes do you have a loan agreement or written correspondence acknowledging loan?

pepperrabbit Wed 20-Mar-13 19:42:51

What documentation do you to evidence the money went in as a loan?
How is it described in the audited accounts?

Jacksterbear Wed 20-Mar-13 19:31:49

Borrowed money is neither income nor profit of the organisation.

Alad Wed 20-Mar-13 19:29:08

A directors loan is normally money you've lent the company, ergo its yours. There might be something restrictive in there memo & arts though.

not2tall Wed 20-Mar-13 18:53:50

advice needed: I just resigned from a small not-for-profit business. I'm currently owed a director's loan of £4200. the company is refusing to replay my loan as they say this is in contravention of their not-for-profit status; namely, this article:
5.The income and capital of the organisation shall be applied solely towards the promotion of the objects of the organisation; and no part of the income or capital shall be paid or transferred, directly or indirectly, to the members of the organisation, whether by way of dividends or bonus or otherwise in the form of profit.
are they correct? or should I continue to request repayment? Many thanks for any advice.

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