In Ventura UK Ltd v HMRC TC06028, the First Tier Tribunal (FTT) considered whether a credit to the director’s loan account in respect of salary had been paid and so should be subject to PAYE.

The tax point for salary is found in s.18 of ITEPA 2003 and is the earliest of:

  1. When payment is made on account of earnings.
  2. When the employee becomes entitled to payment of or on account of the earnings.
  3. For directors (whether they were directors at the time):
    1. When the sums are credited in the accounts or records.
    2. If determined by the end of the period to which they relate, the end of that period.
    3. If determined after the end to the period to which they relate, the date they are determined.

At the end of each year (starting 2011/12), the chairman was voted a fee of £16,000 to be paid when the company had sufficient funds to repay loans he had made.

The FTT found that:

It took the view that the PYA did not successfully reverse the charge to tax and NI.


The FTT noted that to avoid the tax and NI, the chairman would need to have stated “that he did not consider the annual fee payable to him in advance of each trading year-end, before the vote for accruals in his favour”.


Director’s loan account
HM Revenue & Customs (HMRC) do a toolkit for advisers. This is our own version with planning points.

Real-time Information (RTI)
Our section of guides and articles to RTI.

External link

Ventura UK Ltd v HMRC [2017]UKFTT 0585 (TC)

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