Use of Home Office & Dividends

JJH1969

I have recently taken over a client from another accountancy practice and there are a couple of things in the accounts which have made me wonder! The accountant have made a deduction for a home office allowance of £5.00 per week for 10/11 accounts - I thought the maximum was £3.00 per week increasing to £4.00 per week in 12/13?
Also dividends were decided upon and posted in the accounts well after the year end date of 31st March 2011(September 2011 to be exact). They were then paid to the director in September 2011 but the accountant posted them in the 10/11 accounts as interim dividends and added them to the directors self assessment for 10/11. I really dont get this as I thought interim dividends were paid during the financial year and final dividends after the accounts have been finalised. I also thought they were taxable on the director when paid so they should be on his 11/12 self assessment?
Am I going mad or are they!

hunterhouse

You may wish to consider the following:

1) £3.00 per week is the allowance, not the limit for the expense of working from home;
2) There is a distinction between the date a dividend is declared and the date it is paid;
3) The DLA account is sometimes used strategically as a "no man's land" which allows some to claim "yes - the dividend was paid" and "no - the dividend was not illegal because it wasn't actually paid";
4) The previous accountant deliberately back-dated the events;
5) The previous accountant mistakenly back-dated the events.

May I ask if you are an AAT registered MiP?

Hunterhouse

JJH1969

Thanks for the reply. I have an exemption from AAT MiP scheme as I am a member of CIMA MiP scheme.

1) £3.00 per week is the allowance, not the limit for the expense of working from home; -above this though a calculation is required to prove it - there isnt one
There is a distinction between the date a dividend is declared and the date it is paid; - it was declared and paid on the same date after the final accounts were produced

hunterhouse

If the client cannot shed any light on this then, under the circumstances, their former accountant should not be too surprised to receive a polite letter querying the situation.

The answer should make interesting reading.

Hunterhouse

reader

Seems like you know your stuff and you're not going mad

Even if you don't get a response from the previous accountant, I wouldn't worry too much about the previous returns (unless your client wants to pay you to submit amended returns); I would just concentrate on getting things right going forward.