There's no contract. Could we say: director A should receive £100,000 and director B £50,000, all monies to be paid in director's loan accounts?
Thanks. What are the new arrangements?
Obviously the cooresponding taxes would have to be paid for before being transfered to the DL accounts?
BTW, the DLaccounts are positive.
I'm sorry but I didn't want to ask information easily available on the web.
The question is not related to drawing money out of the Director's loans.
My question, expressed in a different way, is the following. The 2 directors have a different way of seeing the situation:
- one considers that their participation has increased the company's value, and little money should taken at this time
- the other one considers it is time to draw a salary for the past years when they worked w/o salary.
What would you recommend? Obviously (correct me if I'm wrong), there is no way to receive money for deferred salaries without paying taxes now. The only reason I mentionned to pay in the DLs was to avoid cashflow problems.
Another way is mixed: pay the difference between the differnt salaries due into the DL of the one who is due a higher salary to reduce taxes.
Case 1: 100k and 50k paid to each director in their DL
Case 2: 50 k paid into one DL
Is my question clearer?.
You have to pay the taxes and NIC at the tme of paying into the DLs, I presume.
BTY, you mentionned 'new arrangements''. That's why I asked what they were.