Lets use an example to answer the above question:
Company’s Year End is: 31/03/2013
Corporation Tax (CT) Payable: £2,000.00
1. Journaling Corporation Tax Payable:
Once you have the final CT payable, you will need to journal the amount into the ledgers, the journal system can be accessed through the full chart of accounts (COA) from your dashboard by clicking ‘Reports >> Chart of accounts’ from top navigation menu option, followed by ‘New Journal Entry’:
See the example below:
This will enter both the CT expense in the Profit and Loss Account and the corresponding liability on the Balance Sheet.
Tagging Corporation Tax Payment:
You now need tag the CT payment from bank in order to clear the CT liability from the Balance Sheet, simply select the option when tagging the payment called ‘Tax payment to HMRC (e.g. VAT, PAYE or Corporation Tax’ followed by ‘Corporation Tax’:
Click here to visit our knowledgebase guide on ‘Tagging your Bank Transactions’ for further help.