Ltd bookkeeping query

[Questions&Questions]

New LTD, trading for 6 months.

For first 5 months all transactions were put through a personal bank a/c. Would you therefore just put everything through the DLA for bookkeeping purposes?

 

[Wendy B&W Accounting]

Yes through dla

 

[Questions&Questions]

Ok, thanks.

Let me give you a brief scenario:

Over the 5 month period £50k sales go through the DLA. £35k goes out to subcontractors, £5k in expenses and the remaining £10k is taken by the director. However, £1k is then reintroduced back as mileage.

Does the remaining £9k need to go through the PAYE system now or do director's just put everything through in one go at year's end depending on the DLA balance?

 

[Robert Pearce]

If the director's loan account is overdrawn by £9k, then there are a number of ways to clear this. The director could take a salary (if he has no other income for 2011/12, then he may want to take a salary of £7,000 or so before 5 April to take advantage of his personal allowance) or the company could declare a dividend if sufficient profits have been made. He could leave it as an overdrawn balance, although there are benefit in kind and corporation tax implications from running an overdrawn loan account.

He really needs to talk to his accountant about his particular circumstances so that it can be dealt with in the most tax efficient way.

 

[Questions&Questions]

Ok but do the corrections need to happen throughout the year or can everything be put through in one go at year's end?

For instance: can a director (close company) just take money out of the business as and when he feels like it, posting all entries to the DLA, and then correct it at year's end by means of mileage/salary/divi?