I'm sure we've been through this many times before but am just wanting someone to confirm my understanding.
My problem is that a client I'm just taking on from another accountancy practice has until now paid himself dividends on a monthly basis depending on what the company can afford and then his accountants have checked with him at the end of the year how much he has paid himself and produced one set of paperwork dated on the last day of the financial year. There is no significant DLA credit so he's not drawing from funds that are already his and the amounts taken over the year are significantly more than £5k so we're definately into BIK territory. He says that the previous accountant says it's fine to do this as long as the dividend paperwork is issued at the end of the year and that he really doesn't want to do it monthly. I have explained that there's not really a choice unless he wants it declared as a loan and a P11d produced but he insists it must be fine as the old accountants let him do it.
Can someone just confirm that I'm right on this. I've seen it a few times before (although clients are generally happy to agree to regular paperwork) and I'm wondering if I'm just far too pedantic about the whole paperwork issue. I understood it to be a legal requirement that the paperwork was in place before the dividend was taken and that if this wasn't the case it could cause real problems if there was an enquiry.
Am I right or am I being over the top?