Shareholders and directors commonly draw money from their company without paying PAYE. Their bookkeeper will debit their loan account and these loans typically grow over time to quite significant amounts. When you owe money to your company, you should be charged interest at least at the official rate (which is 1% above the Repo Rate). This interest needs only to be a book entry – Debit Loan Account, Credit Interest Received, and the entry should ideally be done monthly. However, to simplify things, the bookkeeper could be instructed to charge interest on the year end balance at the year end…
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