Director's Loan Account in Credit

[Adr]

Hi,

I have been using a Limited company for a while now, but really haven't put much effort into understanding what my accountant has been doing!

The director's loan account (showing on the company's last set of accounts) is in credit by around 12k. (I think this is because dividends due have not actually been paid out).

If I withdraw this money from the company (i.e.write a cheque to myself), what will be my liabilities to income tax and national insurance?

I know my accountant can tell me this, but I want to try to understand the rules for myself!

Thanks
A

[Craig@Clarity]

You can withdraw a directors current account (directors loan account in credit) tax free at any time.

[Adr]

Thanks Craig,

Am I right in thinking that this is only the case if I my salary and dividends paid in the current year do not take me over the 40% tax threshold?

A

[Craig@Clarity]

No. If you have introduced money into your company or you have declared a dividend already which the company owes you, then you can simply take it out. The unpaid dividend will be taxed in the usual manner.