How to record VAT payment

1

How do I pay off the tax liability from “Liabilities” so that the Bank account shows the correct balance after paying the VAT or other taxes that are recorded in this module please?

2

When you use tax codes, tax amounts are being posted to Tax liability account.

So to pay off the tax liability, simply classify the payment to Tax liability account.

3

Thank you, yes I go to BANK ACCOUNT / SPEND MONEY choose account TAX LIABILITY then enter PAYEE and the amount.

This should then balance my Bank Account, is this correct?

4

Yes but keep in mind, this is just one transaction. You need to enter all transactions into your bank account. And then do the bank reconciliation to ensure everything has been correctly recorded.

5

Thank you Lubos.

6

Hi,

I have tried above, but it doesn’t update the tax reports like VAT transactions report.
After creating the spend money bank transaction against tax liability account, the report doesn’t populate anything in the VAT paid column.
Is there a way to link these VAT payments transactions?

Thanks

7

Can you post screen shots illustrating what you are talking about? And explain what you think is wrong.

8

Hi Tut,

As you advised please view the screenshots below:

Manager Cust invoice
Manager Cust invoice749×515 10.7 KB

Manager VAT payment
Manager VAT payment825×400 7.15 KB

Manager VAT report
Manager VAT report770×428 9.5 KB

Hope above illustration make sense. As I am trying to mark VAT period (transactions) as filed and paid.

9

Tax Transactions is a collection of tax components from sale & purchase invoices.
The payment of taxes against tax liability is not related to any sale or purchase. so its not shown on the Tax Transactions.
In your Summary page click the blue figure against Tax Payable and it will show all the tax transactions including the payment made.

10

Thanks sharpdrivetek.

So technically there is no way to show in that report (Tax Paid column) that tax has been paid to HMRC?

11

The report is based on Sales & Purchases Invoices transactions which have used the “Tax” field.
A summary of the VAT you have collected from Customers and paid to Suppliers.

Payments to the HMRC don’t use the “Tax” field, therefore they don’t appear on that report.
You haven’t sold or purchased anything with the HMRC, you have just paid them the balance between the VAT you have collected and paid.