Did you enter the initial amount of £240.40 as a liability on the CT account? Usually this would come about when you complete your year-end or setup your opening balances. So basically the CT nominal account is £240.40 in debit and then when the payment is made it’s brought back to zero. Without the first part it will just show the account as £240.40 in credit.
Yes that’s correct, It’s confusing but debits and credits are reversed in accounting terms. Did you switch to QuickFile from another accounting application? Usually when you setup the opening balances you’ll have an entry there to credit the CT account with any amount owed to HMRC at that point in time.
You can journal this in later but I would recommend speaking to your accountant regarding this as there will be a contra-entry you need to make.
EDIT
I’m not an accountant but I understand that you need to enter a journal as follows:
Debit: Corporation Tax Charge for the Year (8500) Credit: Corporation Tax (2320)
We haven’t switched to QuickFile from anything, we’ve been using it since we set up the company in May 2012.
We run the business in our spare time so we only have around five clients and very few payments to reconcile. Because of this I thought accounting would be relatively simple!
From what I’ve read and what you’ve said, it seems that tagging the bank transaction as Corporation Tax has debited the “Corporation Tax (2320)” account with that amount. Based on Joe’s answer to this question, it seems I need to add a credit to the “Corporation Tax Charge for the Year (8500)” account. How can I do that when journal entries need to balance? Do I need to “untag” the bank transaction first?
Even if/when I’ve managed to do this, I still don’t know whether it’ll disappear from the assets on the balance sheet. Especially as the tagging process seems to debit account 2320 again for the same amount.
If you enter the journal as per the edit on my previous post that will bring the 2320 account back to zero and therefore it will no longer show as an asset on your balances sheet.
The 2320 account is currently in credit so debiting it will zero the balance.