BBL and repaying family loan

Richiered

Hi everyone,
When starting my business I took a small loan from a family member of £3k to help buy stock. Unfortunately COVID-19 meant we had to temporarily close our Salon. 
I took the Government backed Bounce Back Loan to help me pay back a start up loan and provide some working capital once we're open again. 
I'm a sole trader, I'd like to use some of the BBL to pay back a the loan to a family member but not sure how to record this in my business bank account and how this could be accounted for in my end of year tax return. 
I know that as a sole trader I only pay tax on profits, I'll be paying myself a wage as 'drawings' but not sure how to account for the repayment of the family loan. 
Please help ???

Pennywise

How dd you show the loan in your accounts when you received it?
If you showed it as cash introduced to the capital account, then the repayment is drawings.
If you're showing it as a liability on the balance sheet, then the repayment clears the liability.
Either way, it's not an expense on the P&L account, nor is your drawings.

Richiered

So the loan was paid to a personal account prior to my business account being setup. 
I guess I'd have to show it as a liability on the balance sheet?
The business launched mid Feb '20, our first accounts will be due next year. 

Richiered

Can anyone help with my comments above?

Lomast

It was a loan to you personally so you need to draw the money from the business paying any relevant taxes on it and then repay the loan personally.

bris

As a sole trader its a personal loan. You used it to buy stock so the stock is an expense against the profits. The loan as mentioned above is your problem, it gets paid back from your drawings.