Are you referring to Manager? Manager never had support for withholding taxes when recording cash payment. The support will be eventually added.
As a workaround, you can create custom liability account called Withholding tax which you can post negative amounts to decrease amount deducted from cash account.
I posted my querry before i saw this discussion. Now before then, i have been having very difficult issues with the withholding tax in manager. What i have done now is to create withholding in my profit and loss where i pack my withholding deductions but it is not helping. this is because when i run my tax reports, these are not captured as taxes paid to the government.
Please advise appropriately how this can be handled until you incorporate it into the purchase invoice.
I agree with SeyramâŚthis must be treated as urgent.
Dear Manager Team
Please can you confirm that the withholding tax deducted at the payment stage support is added by you. I can see you have made the tax account linked at the payment stage but the payable need to be adjusted with the full amount.
For Example:
Repair and Maintenance 100 Dr.
Account Payable - ABA Electronic 100 Cr.
Now the payment is made.
Bank 100 Cr.
Account Payable - ABA Electronic 94 Dr.
Withholding tax Payable - ABA electronics 6 Dr.
The problem is withholding tax payable is not a payable control account instead itâs a normal account plus this entry is not reducing the payable.
We have already purchased the cloud version of yours and we are waiting anxiously for this feature.
Regards
Sheikh Sheraz Ali
How can you be paying 100 to ABA Electronic if you are deducting withholding tax of 6 - wouldnât it be
Bank - 94 Cr
Account Payable - ABA Electronic - 100 Dr
Withholding tax Payable - 6 Cr (entered as a minus number -6)
Alternatively, deduct the withholding tax at the Purchase Invoice stage.
Repair and Maintenance 100 Dr
Withholding tax - 6 Cr (entered as a minus number -6)
Account Payable - ABA Electronic 94 Cr
Now the payment is made.
Bank - 94 Cr
Account Payable - ABA Electronic - 94 Dr
Hey Lubos
In the 2017 feature of the sales invoice, the withholding tax feature is awesome. The amount is posted on the assets side of the B/S as tax receivable. is there any other posting necessary to knock it off or it remains like that for each given trading period?
Liddon
Doesnât the withholding tax deducted from Sales Invoices become an amount prepaid (by others) towards your tax return tax liability. Therefore the amount would become a contra against your tax liability.
Say you had 1000 withholding tax deducted during the year which was paid by others to the tax authorities.
At year end you had a tax return income of 8000 at a tax rate of 20% - so a tax liability of 1600.
In paying the tax liability you would contra the prepaid 1000 so only 600 becomes payable.
The accounting entries for this would depend on the business type (sole proprietor, partnership, corporation) and if the 600 is being paid from a business or personal bank accountâŚ
Balance sheet accounts carry forward without change, even after you change the reporting period. If it was an asset in the earlier period, it will be an asset in the later period. Think of it like your bank account. Your bank balance does not disappear when the new accounting year starts.
Is this feature available now?
WHT has always been available as a separate account entry either at the invoice or payment stage.
@Brucanna is there any guide available on how to incorporate Withholding tax on purchases in the software and how to get reports on tax deducted there on?
There is no such guide, @yameen101, because withholding tax has not been implemented for purchase invoices. As of now, it is only available on sales invoices and credit notes, that is, on forms related to Customers. There is supposedly a plan to extend it to Supplier-related forms in the future.
What is your exact use case?
Assuming that you can claim the WHT
By adding an additional account line, refer to the above demonstrated examples.
It gets posted to its own BS Liabilities account and is then cleared with the payment of other taxes.
Is there any progress on the witholding tax on purchase invoices? It works perfectly on sale invoices but it is also needed on purchase invoices in some cases so it would awsome if you could give us heads up on the progress made there.
Thanks again
I donât think it is necessary. I used to demand for it too but Manager already has what it takes to properly account for it.
Just create accounts and enter negative numbers to record the tax.
Check the balance of that account at the end of the month and pay to the tax authorities afterwards.
You can export the content of the account where details like contact can help you sort out the amount payable by contacts (suppliers). You can then prepare your returns and go pay.
I am assuming you understand Manager.io very well.
For Withholding tax on Sales invoices, it is very important to have the current feature because it is a receivable asset.