Dla

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Poodle
Poodle Registered Posts: 711 Epic contributor 🐘
in General accounting discussion
Hi

I have a company who at the end of their 3rd 1/4 this year had cap & res of £17K, (£16.5K profits for this year, nothinh b/f). Current assets £127K includes DLA of £45k all taken this year, Current liabilities £115K, £50K out to bank £15K CT overdue, and I would say not enough WiP to crawl out of this in the short term.


Any idea's as to how I should start off the next meeting?

P

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  • Dean
    Dean Registered Posts: 646 Epic contributor 🐘
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    Go for the throat and say:-

    "you've got to put 45k back into the company within the next quarter or the company will have to pay 25% in tax for you as directors' to have use of that money".

    Don't you just love it when clients' draw out too much money! :001_wub:

    Regards

    Dean
  • peugeot
    peugeot Registered Posts: 624 Epic contributor 🐘
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    Bear in mind that when looking at whether amounts have been withdrawn in excess of reserves, you should just at the total reserves, not reserves + Capital as you can't draw down the 'capital' element of 'capital and reserves'.

    Best regards
    Steve
  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘
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    That was quick!

    Steve OSC = £2

    Dean,

    You say that they have to pay back by the end of the accounting period or suffer the 25% but I thought that "if" the loan is repaid within the 9 months 1 day (see the pig fly over!) after the year end then relief is available and if :laugh: they do repay then should I still complete a CT600A?

    I have not been doing so up to date electing to make a note on the accounts regarding repayment of directors loans and giving a date. Have I been neglegent? :blushing::blushing::blushing:

    Is there a materiality level for a CT600A as well because you know what it is like they just draw down willy nillie and leave us to sort it out at the end of the year with a computation of the DLA.

    Poodle
  • Dean
    Dean Registered Posts: 646 Epic contributor 🐘
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    Poodle wrote: »
    You say that they have to pay back by the end of the accounting period or suffer the 25% but I thought that "if" the loan is repaid within the 9 months 1 day (see the pig fly over!) after the year end then relief is available and if :laugh: they do repay then should I still complete a CT600A?

    That is quite correct. My comment will buy you some time :). You can obviously tell the client this but you'll find they leave it till the last minute and you'll find yourself in a position you can't help them with.

    Obviously you need to bare in mind the P11D position as at 05.04.08. If they want to avoid Class 1a NI then they have a month or so to sort it :thumbup1::lol:

    Regards

    Dean

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