HMRC debtor and creditor at year end

Problem reported by Jonathan Smith 10 years ago

My auditor queries that HMRC appear in my Debtor and creditor lists at the year end - surely this cannot be correct?

The balances should be in the VAT control and the PAYE control accounts not debtors and creditors.

Pelase advise

2 Replies

Hi Jonathan

You are indeed correct - balances owed to HMRC should not be listed within trade creditor/debtors. Unfortunately, it's the way ClearBooks has designed the system due to everything relating to 'bills'.

The VAT situation can be changed by heading to Settings > Toggle > Accounting > VAT return journal (tick) - this will then create a journal to a specific VAT control a/c instead of lumping it into trade creditors (if you do this the way you subsequently analyse the payment to HMRC VAT from your bank a/c will change)

Payroll unfortunately is a pain. I presume you're using ClearBooks to process the payroll? The best you can probably do is process the payroll like you normally would, find the PAYE bill the system creates, delete it then replace it with a journal analysed to a PAYE control a/c (that you'd need to create by heading to Settings > Codes > Create).

An easier workaround in my opinion is simply for your accountant to be wary of the fact PAYE/VAT balances are lumped into trade creditors and have them make the appropriate adjustments when drawing up the accounts.

Just for some background - this used to be a common way of keeping manual records back before computers and it was carried on after computerisation with some systems.

Also, from a users point of view, many do like everything "payable" to be shown in one place, whether that be VAT, PAYE, employee expenses or salaries, consequently, as Kevin mentions, if the statutory accounts require these balances to be separated out on one day of the year then it's quite easy for the accountant to do so.

As and when CB's Final Accounts encompass "small" as opposed to "micro" formats then it's likely the system will do this separation automatically.

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