How to show opening balances for tax liabilities

Question asked by Richard Cooper 11 years ago

I've been setting up my opening balances in Clearbooks and I have a few related questions about the best way to record my opening VAT, CT and PAYE liabilities.

  1. I've created a supplier for HMRC PAYE and used "Getting Started" > "Creditors" to create 3 opening creditor balances for that supplier to show PAYE, EENIC and ERNIC liabilities. Is that the recommended approach?

  2. I've entered our VAT liability under "VAT payable" on "Getting Started" > "Other balances" but I'm not sure that's right because it does't show up as "VAT due from HMRC building up" on the dashboard page. Should I be using one of the other accounts like "VAT control" or "VAT cash control"? (What is the difference between those 3 accounts, by the way) Or should I set up a trade creditor for HMRC VAT and use that like I did with PAYE?

  3. For corporation tax I've recorded that under "Corporation tax" on "Getting Started" > "Other balances". Is that correct or should I have a trade creditor there too. http://www.clearbooks.co.uk/support/guides/corporation-tax/how-to-record-corporation-tax-in-your-accounts/ seems to indicate that I should have a supplier for CT

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2 Replies

Hello Richard,

1) That is okay to do. In most cases, we do have customers who create one bill but put PAYE, EENICs and ERNICs as separate items.

2) That one is incorrect. You will need to change it to VAT control account code. This will make it show up on the VAT building up. VAT Cash control is for customers who are on the cash accounting VAT scheme and VAT payable is mainly used by accountants. Please use VAT control for this initial bill.

3) This one is one or the other. If you have paid all that off as Corporation tax already, you will keep it on the Other balances. However, if you have received this bill last year and you need to pay if off this financial year, then it will be the same as the PAYE and NICs you did before.

Hope this helps.

Vanish

Best answer
11 years ago

1) Ok. I will certainly create one bill with three line items for future pay-runs. But that doesn't seem possible via "Getting Started" > "Creditors"

2) Thanks. I will change it to "VAT control". I see from http://www.clearbooks.co.uk/support/guides/getting-started-2/vat-settings/ that I also need to create a supplier for the "HMRC entity". But you are saying that I don't need to show any liability to that suppler at the start of the year?

3) Ok. Sounds like I need to do it as a bill. Is there a preference for having 3 separate suppliers for PAYE, VAT and CT or just one HMRC supplier for all three? Or is it whichever I prefer?

May I suggest that you document some if these issues in http://www.clearbooks.co.uk/support/guides/category/getting-started-2/. The "VAT control" vs "VAT payable" one in particular seems likely to cause confusion.

11 years ago

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