Overdrawn DLA and illegal dividends

imeldabye

Hi all, I have a ltd company year end 28 June 2012. He had a net profit (after tax) of around £13.5k but paid himself around £15k during the year in Dividends. This was due to shocking lack of paperwork and failing to listen to me telling him that you can only pay dividends on retained earnings rather than what cash he has at the bank at any given time :glare:
He has only provided me with sales figures relating to invoices/jobs that he has been paid for. So if he is able to provide me with some turnover figures (ie invoices raised before year end but not paid) to create a debtors ledger, can I then turn the negative figure on the BS into a positive this way? It is still profit isn't it- so legal dividend rather than illegal?
Or should I show this £1500 as overdrawn loan a/c? To reverse in the next year's accounts. I understand the whole 9 mth CT charge thing, but my question is- a) how will the revenue know when it is reversed if the accounts are done at year end (i.e. 12 months after)- even if I made the entry in the books in 3 months' time this won't be noted on the balance sheet- or is it just in case they come knocking? and b) what is the double entry? is it DR Bank and CR DLA :huh:Sorry if I am being very dense.
thank you

RAS

Has the company any reserves built up from previous years? Dividends dont have to relate to current years profits only. Any unpaid sales may solve the problem anyway. However, are you sure that he hasnt also given you any supplier payments on a cash basis as well?

imeldabye

thanks for posting. No- nothing in the way of reserves b/f and no cash payments to suppliers either. Think I will have to do a DLA and lay the law down for next year. This is a real problem client- he refuses to let me "tidy" his books for accounts prep- giving me summaries of expenses and income generated. :huh:

Gem7321

Is there any work in progress you can bring in?