No,I have a small business that is part financed by a loan from me to the company.
Now I wish the company to repay the loan to me.
My question is; do I show the repay as an administration expense, so that it appears in the P&L?
I think I should, otherwise say I have Sales of €100K & admin expenses of €50K, then I have a trading profit of €50K and must pay corporation tax on €50K. But if the €50K came from a director's loan & the company repays the director's loan then there is zero money to pay the corporation tax.
So I think the repay of the director's loan should be shown in the P&L as an expense.
Am I correct?
Corporation tax on profit of €50K = €6.25Khhhhhhhhhh thanks for responding but I can't get my brain around this
example
Sales €100K
Admin expenses €50K
Trading profit €50K
Corporation tax on profit of €50K = €12.5K
Retained earnings €37.5K
So the company cannot repay the €50K out of retained earnings of €37.5K so how does this work?
Thanks...John
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