I am very definitely not an accountant but just helping a friend with his accounts - a very simple business with just him as an employee who is also a director. And have got myself into a total year end pickle - please be kind!
We have just finished the 2nd year of trading and I have just filed accounts with HMRC / companies house. However, looking at the balance sheet I have entirely overlooked making journals for any payments to HMRC for anything over the last 2 years, so all showing as assets.
1).I’ve simply added an entry to the corresponding bank transaction e.g. net salary and HMRC PAYE payment, and now I have PAYE 2210 showing in assets and liabilities. Payroll I run in separate software and then have just added the bank transactions ( I’ve only ever managed simple accounts on spreadsheets before rather than through software so i’m a total journal novice.)
2) for VAT I’ve submitted VAT via quickfile and then tagged the bank transaction as VAT payment so I think thats OK, though there is always a liability showing at year end as the VAT year end and accounting year end don’t match. - I think this is fine…?
3) for corp tax this is showing as a credit in 2201. I’ve submitted through HMRC and then just tagged the bank transaction for the payment to them when it was made.
I’ve looked through the knowledge base and I’m OK with what I need to do going forward to enter these transactions correctly (more or less), but what do I need to do to journal out these entries for the last 2 years so the balance sheet is right?
I’m terrified of adding in journals which just make the problem worse.
And sorry for being such a numpty, hopefully someone takes pity on my total ineptitude.