A company whose year end is September, declared an interim dividend in March 2016 after producing their management accounts and leaving a provision for corporation tax in the business, the interim dividend was declared, minited and the tax vouchers produced. It was a legal dividend at the time as there were sufficient profits at the time to declare the level of dividend taken. The Interim Dividend was included in the 2015-16 Self Assessment Tax Return for the Director.
However, in the second half of the financial year there was a downturn in business so by the time the year end accounts were done it looks like the interim dividend was too high. Does any member of the forum know what the protocol should be under these circumstances? Should the overpayment of the interim dividend still be debited to the Directors Loan Account for the year end accounts and what should happen with the already filed personal tax return? I can only find guidance online for illegal interim dividends online, where I believe these were legal at the time they were drawn. The business has now returned to healthy profits so it is purely a timing issue when the year end accounts are drawn up. Thank you for any assistance you can give.