Does a £35k dividend clear a £35k overdrawn DLA | AccountingWEB

Does a £35k dividend clear a £35k overdrawn DLA

Firstly,many apologies for posting this question as i know similar if not the same question has been asked before. I have quickly searched any answers to find the answer but have drawn a blank.


DLA overdrawn by £35k at the year end. It is now 8 months since the year end. We now know that there was £32000 of undistributed profit at the year end. If i clear the £35k by £30000 final divi plus £5k interim divi now does that remove the need to pay S455 tax? He will have taken out probably £35k+ since the year end.


I know in the past, i have seen people argue that Loan 1 of £35k is cleared by the dividend and that the amount withdrawn since the year end is a separate loan. Do the Revenue accept that?


Alternatively, what about backdating a £32k dividend to a date say 14 days after the year end? I must admit that doesn't sit comfortably with me but does anybody adopt this approach. I guess the Revenue can never prove the date a minute was passed crediting the dividend to the DLA?


Any help greatly appreciated and once again apologies for posting a question that has almost without doubt been covered before.



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Rule in Clayton's Case

taxhound |
taxhound's picture

Thanks for that taxhound -

young ronaldo |


mn2taxhbj |

is this how the Clayton rule works?

Red Leader |
Red Leader's picture

@ Red Leader


Am I missing something?

petew |
petew's picture


mn2taxhbj |