LTD Company Debts

DullGreyGuy

Grumpy_chap said:

I am unclear as to how the OP would manage the loan, either normalising the loan to non-repayable (salary / dividend) drawings (which may give rise to different tax liabilities) and may as a technicality require the loan to be shown in the accounts as repaid (at which point HMRC will expect the CT to be cleared) before the salary / dividend drawings are recorded.  The other route would be the OP defaulting on the loan (at which point the Ltd Co. becomes insolvent) but I really don't know how that works unless the OP simultaneously declares personal bankruptcy.  The OP also needs to be mindful of not falling foul of rules around Director's Duties and / or Wrongful Trading.  

Insolvency is beyond my accounting knowledge but learnt a little while ago that my favourite butchers had been sold and then subsequently shut down. A look on Companies House shows notification of the change in significant control notified mid December effective start of December and then 3 months later it reverting to the original owners with an effective date of mid December and then administrators appointed a couple of weeks later.

The initial administrators report shows them £350k in the red with £82k to preferential creditors (HMRC and pension scheme) and a further £55k to HMRC for corporation tax. At that point the Director Loan account wasn't unknown.

Later updates showed the directors owed the company £200k, and then the administrators accepted an offer of £100k as final settlement for the directors loan. Took them another year to pay it but the directors loan account now shows 0.

Obviously dont know what's happening behind the scenes, any action against them personally (though they've left the country), but they appear to have managed to escape a notable amount of the debt and now setup a new butchery in Australia