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Post Info TOPIC: Recording Interest Paid to Director in Sage


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Recording Interest Paid to Director in Sage


I'm struggling with the correct way to record interest paid to a director.

I know I need to record this on form CT61, but this question relates only to sage.

 

Currently interest is calculated monthly dr NC 7902 Director Loan Interest and cr NC 2109 Accruals 

Keeping things simple, Loan interest pa is £1,000 paid yearly. I need to pay HMRC £200 (20%) and the Director £800. But I have full £1,000 in 7902, but I'm sure I should separate net and tax. So I think I'm right to say 7902 should be net, but where should I allocate tax ?

Thanks

Michael 

 



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What does your Accountant suggest Michael?

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Master Book-keeper

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The loan interest is surely being 'paid' monthly!

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Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 



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Casu wrote:

What does your Accountant suggest Michael?


 I don't have an accountant, hence the question.



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Cheshire wrote:

The loan interest is surely being 'paid' monthly!


 

Calculated monthly to smooth the accounts, but I only need to pay yearly. That's my understanding from form CT61



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Master Book-keeper

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MichaelWGroves wrote:
Cheshire wrote:

The loan interest is surely being 'paid' monthly!


 

Calculated monthly to smooth the accounts, but I only need to pay yearly. That's my understanding from form CT61


 Oh dear. That would be wrong then.



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Joanne  

 

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

 



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What would be wrong?


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Hi Michael,

I don't know if this is too late, but we record it as Dr 7903 (loan int paid) gross, cr 2213 (loan int liability) net, cr 2212 (Income tax on interest paid) tax amount

 



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Nicola

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