I am bookkeping for a small limited company. First year of trading. The director is the sole employee.
For the first 6 months the company traded at a loss. They are a craft manufacturing company.
They then started to break even, recoup some of their losses, with the end of year accounts showing a small 3 figure profit.
Throughout this period, the director didnt pay themselves a wage. Now that I have finisshed the companies accounts to trial balance stage, they are keen to pay themselves a small wage, effectively the amount of profit they have made.
Can they do this, now that the company is effectively in their second year? Can the director retrospectively pay themselves a wage for the past year, with it being entered into the accounts as an accrued wage, bringing the annual profit down to zero?