Labelling dividends/salary on bank transactions?
My client has historically not labelled the transactions between himself and the company bank account (he has a Ltd company and he is the only employee/shareholder), taking money 'willy nilly'.
At the end of the year he takes the basis salary to keep below the thresholds and deems the rest to be dividend or allocates against the directors current account, as he has invested a bit of money in the company.
I have a feeling that the revenue may frown upon such flexibility and think I have read or heard somewhere that the dividends and salary should be clearly labelled. My concern is that the revenue could deem all withdrawals as salary???
I know there also arises the issue of dividend vouchers in this situation.
Can someone please put me out of my misery?
Thanks in advance