I have just got a new client, she is a Limited Company who started trading 2011 and has been taking money from the company as drawings.
I believe she should be paying herself a salary and perhaps dividends later when she starts to make profits, I am I right in thinking this?
The money she has taken so far from the company, am I right in thinking that this would be posted to Directors Loan Account?
To reduce the loan account balance, would she have to pay herself backdated salary and would she have to register herself as an employer and pay PAYE & NI?
You are right. She should (in theory) be paying herself a salary. A dividend can be paid later, but only from post tax profits.
Any money she takes now should be posted to her DLA.
And she can pay herself a bonus before the end of the tax year (remember the special rules for NI for directors).
She should also be made aware of her responsibilities as a director (eg the money in the company bank account belongs to the company, not her!). In particular, there are tax consequences of having an overdrawn DLA at the end of the accounting period.
However, all of this is subject to any other circumstances which are relevant to her.
