Birmingham 0121 728 5581

Bristol 0117 332 3844

London 0203 667 8693

Manchester 0161 537 2702

Southampton 0238 235 8122

Directors overdrawn loan accounts

Directors overdrawn loan accounts

These are debts due to the company and the directors will be asked to repay them.

Directors can borrow loans from their company.  As long as the loan is paid back within nine months the debt will be tax free.

When a company enters an insolvency procedure the IP will look at the last set of accounts to see what the position was with the Directors Loan Account.

They will then look at the company’s records and ask the company’s accountants for details regarding the movement since those accounts to the date of insolvency.

If the directors have an outstanding loan account the IP will have to write to the director asking them to pay back the loan.

Depending on the circumstances the IP may have to take formal recovery proceedings against the director to recover the debt due to the company.

David Kirk ACA FABRP

David Kirk

David Kirk is a Chartered Accountant and Licensed Insolvency Practitioner.
Read More

Business Renewal
“You made a very difficult time much easier for us.”
R Johns
Business Recovery
"We were cornered and thought it was the end of the business after 20 years but he got us out of it."
Lynne Firman of Just Beds Ltd
Business Renewal
"It was a very difficult decision to make to go into Administration but now I am so glad we did it. David and his team were great thank you."
Jacci Dellaway of Baylift Services Ltd
Business Rescue
"David Kirk helped us with an Administration to rescue the business. He did exactly what he said he would do. It has worked out very well."
Chris Pratt of Elecsis Ltd
Business Rescue
“At the initial meeting you told us the good and bad things that can happen and were honest and told us to watch out for. No one else had done that.”
J White