Company X has a year-end of 31.01.19. The director’s current account was overdrawn as at 31.01.19 and he has 9 months from this date to pay back the loan in full/part to avoid/reduce any Section 455 charge.
The director is paying back the loan gradually within the 9 month time frame after the end of the financial year of 31.01.19. Recently as at August 2019 he has repaid some of the monies back into the business but is still overdrawn.
So far the company’s accounts have not yet been submitted as the Section 455 charge is liable to change once the director makes further repayments into the business bank account.
Currently we are updating the bookkeeping regularly after the year end of 31.01.19 to reassess the level the director’s account is overdrawn by. Generally the Section 455 Charge can be reduced by credit entries in the director’s account such as expenses paid from personal funds, salary journals and by paying a higher level of dividends post the year end above.
My question in relation to the above scenario is as follows:
Should we wait until the last minute where it is almost 9 months after the year end and submit the accounts once we have re-assessed the level the director’s account is overdrawn by?
What other strategies do other accountants use?