I've just taken on a client where in the previous year there was a director's bonus that was equal to the following 9 months salary payments which fall in the accounts I am now preparing.
Looking at the figures in older accounts it would appear this is a regular thing, so every year the company has accrued for the salary that is equal to the salary paid out in the following 9 months. All the payments are at the maximum salary level without any PAYE/NI being payable.
Obviously the bonus has therefore been processed for PAYE/RTI within 9 months of the year end.
This currently leaves me with either the equivalent of 3 months salary in the accounts, or no doubt a discussion with the client where they will state there is a bonus due at the year end of the exact amount of the next 9 monthly salary payments.
Are there any reasons why this isn't acceptable?