Directors Current Account Explained

In this podcast we explain in fair detail what does it mean to have a directors current account; whether a debit or a credit balance.

Debit Balance -- The Director or the Owner withdraws money from the company and owes them back. This has a direct tax implication as the balance carries interest which is taxed at the personal level (personal tax return).

Credit Balance -- The Director or the Owner pays Company Expenses or deposits money to the Company and as a result they are creditors to the Company. Again this scenario has a tax implication, though a different one. The Income Tax Office may enquire the source of these funds via a capital statement which is explained in a different video.