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During the lockdown many of you with limited companies may have resorted to withdrawing funds from your company bank accounts over and above any normal salary and/or dividend payment taken in the past. This may have been withdrawn as a loan as opposed to a salary or dividend payment.

Below is a guide to help explain the consequences of taking a ‘loan’ from your company and what is known as the Director’s Loan Account ("DLA").

Although your company is owned and controlled by you, legally and for tax purposes it is a separate legal entity. This is important and it is because of this separate legal status and the control you exert over it that HMRC has safeguards to ensure that the funds held and owned by the company are afforded safeguards.

The Revenue pays particular attention to the DLA.

A DLA can sometimes be referred to as a Directors Current Account ('DCA'). This directors loan/current account represents monies owing to you or monies owing back to the company from you. If you borrow money from your company (instead of say declaring a dividend) then assuming the company didn't already owe the same amount of money to you, then this would show within your company accounts as a directors loan account.

Financial year end

When it comes to the financial year end an account is drawn up internally within the More...

If there is one thing that benefitted from the COVID 19 lockdown it was the environment.

Less cars and other modes of transport made an appreciable impact.

Before lockdown the government had introduced incentives particularly relating to electric cars.

Some of these incentives differed in different parts of the UK, particularly in Scotland where more incentives are available and detailed below.

Electric Cars – 100% Allowances

The government in its drive for a greener environment provided what was known as enhanced capital allowances for electric cars. Cars whereby the CO2 emission is 50g/km or less.

These cars are entitled to 100% writing down allowance in the first year as opposed to 18% each year for non-compliant vehicles.

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In our previous private practice post we set out some points for you to consider as the lockdown eases and there is some return to normality. This is available on our website.

Independent Practitioner Today has also kindly published our pointers here.

Towards the end of the article we highlighted some tax planning opportunities and advice that will be set out below and for which further detailed guidance can be provided on a personal basis.

The tax planning will be split between those who practice as individual practitioners or in partnership say with their spouse or partner and those of you that have limited companies.

Sole Practitioner/Partnership

If you have a 31 March or 5 April financial year end then for the year 2020/21 the first part of the year will have seen little or no private practice activity.

The Revenue will allow the 31 July 2020 tax payment (your second payment on account for the tax year 2019/20) to be deferred until 31 January 2021.

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