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Working Tax Credit and Directors Loan Account

(2 Posts)
maltesersaremine Thu 16-Mar-17 10:57:32

Hey guys, this may be slightly confusing and long winded, but hoping to get some advice.
DP and I have been together for over 5 years. We have 3 children in total. Before I started working for his Limited Company, he hadn't paid himself every single month as the businesses bank balance wasn't great, so he has roughly £5000 owed to him in wages from the business. Now as his accountant did all of his paperwork, it was still logged that he was being paid the same amount each month, so therefore Paye and NI was still paid and the money has been sitting in the business as a loan from a Director. Hoping that all makes sense.
In regards to Working Tax Credit/ Child Tax Credit, the money was never taken into account as it happened before we were together if that makes sense? If we were to do drawings on a monthly basis, so that in effect he would draw the £5000 over a 12 month period, would we class that as earnings for WTC? Or would it be irrelevant as it was accounted for years ago?
Technically my first thought was we didn't need to include it, as it has been accounted for, but I suppose it hasn't where WTC is concerned. I am a bit confused lol confused
I may have missed vital info, but hoping this makes vague sense. Thank you x

delilahbucket Thu 16-Mar-17 17:39:19

If it is put through the books as repayment of a loan then it will be not taken into consideration for tax credits. It is previous earned income from whenever tax and ni was deducted. Check this with the accountant though to be on the safe side.

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