Income Tax and VAT payments

Question asked by Alan Bennett 8 years ago

Hi there, I would like to set up bills for my next VAT and first and second payment on account tax amounts.

When I create these could you please tell me which account I should use for the VAT and Income Tax bills?

I was thinking that corporation tax was the right account?

Also, please see image which shows that after creating these bills I now have 'Sole trader tax payable' appearing as a minus. Is that right?

Thanks Alan

file

6 Replies

Hi Alan

Do you submit your VAT returns through Clear Books? If so, you can switch the system on to create the bill automatically. If not, it should be analysed to the VAT control account.

As you're a sole trader [as opposed to a limited company] you're paying income tax not CT. Income tax is a personal affair so the tax payment would simply be classed as drawings.

If you specifically want to create income tax bills so you don't forget to pay them just create them analysed to drawings [you may have to go into settings > account codes and tick the 'show in purchases' box next to drawings]. Creating these bills does not play any part in your account though, it would simply be for your benefit.

As for the tax calculation - nope, that won't be correct. I barely use those indications in all honesty but would need you to click on the tax figure to bring up the underlying figures to know where it's gone wrong.

Wow, thanks so much for a great answer !

Pleasure, hope it all made sense. Hopefully correcting those bills will amend the tax indication figure anyway.

It did - it cleared that 7638 amount after I changed bills to drawings account.

But it now shows profit available: 11816, and tax payable 1816. Not sure why my tax to date has gone up £900 ?

Hard to say - I'd need to see the figures behind the calc. If you click onto the tax figure it should give you a breakdown.

Checked the income/expenses for current year - and it does seem right !

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