Hi All
I have just started working with a new client. Firstly i have found so many issues however one that is bothering me is a year end journal 31/07/2017. This seems to have been put through as they had not taken hardly any money in wages at the year end.
DR Directors Remuuneration £23000
CR PAYE & NIC £800.64
CR DLA Director 1 £11099.98
CR DLA Director 2 £11099.98
The directors don't actually take the money put transfer everything to their personal DLA's and spend from the business.
The issue i have is then in Dec 17 - March 18 there has been payroll processed for £23k and RTI's submitted to HMRC with the value of £11099.98 to each DLA account so could this be double counting?
How would you guys deal with this?
Any help would be appreciated?
Kind Regards
Replies (6)
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What you have illustrated does not prove double counting as far as I can see. Do you have proof?
The credits in the jnl should have been to accruals - it would then have made sense to you.
(Assuming the Dec - Mar payroll wasn’t actually paid), you need to just reverse the YE jnl over the Dec - Mar period.
Net affect is that the 2017 YE jnl was brought the £23k into the P&L, the payroll ensured that it was deductible in 2017, DLAs have reduced by the c£11k.
Re year ending 31 July 2018, you cannot really make a journal entry as at 31 July 2018 in the accounts to 31 July 2018 if there was no obligation as at 31 July 2018 for the company to pay salaries to the directors at that date for the year then finishing.
This is one of these time machine issues.
I would ensure personal allowances have been used for 2018/2019 by possibly processing RTI payrolls this month, but not convinced these salaries relate to the accounts for ye 31 July 2018