Dividends & DLA

Luv me dogs
Luv me dogs Registered Posts: 5 Regular contributor ⭐ ? ⭐
We are approaching year end. I am happy with the basics ie fixed assets, accruals and prepayments but I'm unsure how to tidy up the dividend payments and directors loan accounts. I have been helping out for about 9 months, and it seems previously all payments to directors were posted straight to dividends 3201.
In January our accountant suggested setting up a dla for both directors, and debiting them with the amount they took at Christmas.
I have done this and posted all the subsequent payments to them to their dla.
I would like to tidy these up so I can pass over the records at end March. I haven't dealt with this before and am a little unsure.

Can anybody recommend a link/site/ anything really that will help me get my head round what I have to do.
Thanks for any help,


  • burg
    burg Moderator, FMAAT, AAT Licensed Accountant Posts: 1,441
    Not sure what you understand of dividends but basically they are distributions of profits after tax. All the bank entries that effect the DLA's need to go there. The directors may be prudent and vote dividends throughout the year for which there should be paperwork. If not then leave this for the accountants to sort.

  • Luv me dogs
    Luv me dogs Registered Posts: 5 Regular contributor ⭐ ? ⭐
    Dear Ian,

    Thanks very much for replying. I appreciate it. Do you know of any training links I can follow- past papers?, I've googled dividends/dla/etc but the explanations don't help me unpicking prior year postings.

    At year end we have a cr bal in the p&l code 3200, being profit for the year.

    In theory should this follow-
    starting point cr in 3200
    Jv dr 3200
    cr CT liability
    cr dividends ie dividends that may be drawn the next year.

    So the o/bal position is
    p&l account is zero, and there are now two liabilities. ie new year opens with no profit and two amounts to be paid out. Sorry this is very simple but I am trying to sort my thoughts.

    The accountant has been so busy that he didn't give the CT payable for 12/13 till Christmas 13. I asked him for help as we are coming up to year end 2014. He sent over his paperwork being accruals, prepayments etc for 12/13, I received them February 2014. I've posted them and am going to raise my own journals (accruals, prepayments, depreciation) for 2014 year end.

    As instructed I posted a dr to the dla accounts (opened in 2013, they didn't have them before). In your opinion I should leave the dla accounts well alone and post all payments made to the directors straight into the dividend account 3201. Is this what you advise?

    If this makes me sound like a dummy then I am. I passed PTC 8 years ago and have never done BT. This is obviously something for my cpd. Not sure where to find the training material though. Help!

    Kind regards


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