why is my corporation payments coming under currents assets as this is showing a credit balance as an asset but its a liability
Credit is a liability, debit would be an asset. If you’ve tagged the payment (from your bank account to HMRC) then yes, this would show as an asset (debit), you need to balance it with a journal that credits the balance sheet code and debits P&L.
so what you mean is every time I report a payment to HMRC from my current account I need to add a journal to the chart of accounts but as a credit not debit?
As I understand it (I’m a partnership rather than limited so don’t have corporation tax in my books), you would typically want to show corporation tax as a P&L expense for the year whose profits it relates to, but you only actually pay it over to HMRC the following year. So once you know how much corporation tax you will need to pay for a given year, you make a journal dated for the last day of that year which debits this amount to 8500 and credits the same amount to 2320. That will show the tax as an expense on the year’s P&L report and as a liability on the year end balance sheet.
When you actually make the payment some time in the following year and tag it in QuickFile as a corporation tax payment to HMRC, what that does is debit 2320 and cancel out the liability that arose at the previous year end. If you’ve only logged the payment but not yet the previous year end journal then 2320 will look like an asset, creating the journal will balance it out.
yep that works!! thanks