That 'quick transfer' could actually be a taxable directors loan
You might be borrowing money from your own company without realising it.
If you run a limited company and regularly transfer money from the business account into your personal account, some of those payments may need to be recorded as a director’s loan.
There are a few common ways to take money from your limited company:
1. Salary through PAYE
2. Dividends from available profits
3. Repayment of business expenses or money the company already owes you
If the transfer does not fall into one of those, it may need to be recorded through your director’s loan account. Failing to record and deal with it properly can lead to tax consequences for both you and the company.
That is why it is worth keeping track of what you are taking from the company throughout the year, rather than waiting until the accounts are being prepared to work it all out.
Not sure whether those transfers count as a director’s loan? Send me a message.
