Kinda new here and like my name says I'm just a bookkeeper so totally understand if you don't have time for this but I'm a bit confused and would really appreciate any help.
I've recently been appointed to do the books for a retail company, it's been quite a baptism of fire for me as it's over 10 years since my AAT training, only doing husbands soletrader books in the meantime and I've asked our accountant so many "I know I should know this" questions I thought it time to reach out and ask elsewhere.
I've had a look around on the net over the last few days and the way I understand it is, if a Director's loan account is overdrawn by more than £10,000 and not repaid within 9 months of year end it's taxed at 32.5% per year?
Our directors loan accounts are well over this and any repayments at year end still leave the balance at over £10.000, as far back as I can see this has always been the case.
1. Have I read the rules right?
2. If I have read the rules right, why wouldn't they take dividends to clear their accounts, bearing in mind there are enough available funds to do this?
Thanks again for any help