I’ve been reading through tonnes of the responses on here and still can’t quite get my head round this.
So from what I gather I need to enter the corporation tax liability as a debit to 8500 and a credit to 2320.
Is this ok to do by modifying the year end journal that’s made by the easy year end tool, which ensures it’s listed under the relevant tax year?
Then when I pay my tax I just tag the payment as corporation tax and it removes the debt from my Balance sheet?
I saw in previous posts that Corporation tax was being listed on balance sheets, when I do it myself this no longer seems to be the case is that something that’s changed.
Attached below is all the relevant reports if people could clarify that this is correct i’d be extremely gratified!
I’m not an accountant and can offer general advice. However, if you’re uncertain about things like this, it may be best to contact your accountant.
@Joe gives a good example on how Corporation Tax should be recorded in his post here.
When what you owe is confirmed by HMRC (the figure in QuickFile is only an estimate), you can create a journal dated for the last day in your tax year. Let’s say for arguments sake our tax year ended on the 31/05/2016, and we have a corp tax bill of £1,000.00. I would create the following journal:
This then creates 2 entries - one for your balance sheet:
And one for your P&L:
When it comes to paying the corporation tax, you would simply tag the entry as corporation tax (Click ‘Tag Me!’, then “Tax Payment to HMRC”. Select ‘Corporation Tax’, and it’ll sort itself out. It will no longer appear on your balance sheet as a liability as it’s been paid.
I hope that helps.
Note - I’ve removed your duplicate posts (there’s an ‘edit’ button under each post, and you can post multiple images to each post too), and also your image to protect your account details.
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