Every time a client pays me I transfer a proportion of the payment to a business savings account (which is also used for other surplus funds) to cover VAT & tax due so I know I’ll be able to pay the tax man without hassle! How can I show this on quickfile as a separate amount within the Bank Reserve account so I can see how much of the account balance actually belongs to the business rather than the tax man?
I do this. I just have 2 bank accounts, in real life and also in Quickfile, a business current account and a business savings account. How are you doing it currently?
Yes, I have a business current account & business savings in both real life & QF too. So far (pre-Quickfile) I’ve just kept a spreadsheet which shows payment received/amount allocated for VAT/VAT savings to date/amount allocated for tax & NICs/Tax savings to date/balance (which is available for the business). As it’s a very young business I find this helpful so I can see instantly what working capital is available.
Ah, I think I see what the question is now!
You can run some custom reports which should be able to give you the bank balance less projected VAT due, or anything along those lines that you can build a formula from using nominal codes.
I think I understand in principle what you’re saying, but I don’t really know where I’d start on this! I’ll have a proper look at it when I’ve got more time. Thanks for the advice!
You’d probably need another bank account in QF to do this. You could treat this account as a way to hold any reserves for VAT & NIC and just transfer funds into here periodically.
To be honest if you’re only doing this for reporting purposes it seems a bit convoluted. QF already tracks your VAT liability in the tax summary.
You can also find an income tax estimate here (I’m presuming you’re a sole trader), although it won’t highlight NICs it will give you a rough idea of how much you need to pay.
Hello Glenn, thanks for this, it’s really helpful. I only discovered Quickfile a week or so ago and I’m still in the process of setting it up & discovering how much it will do for me that I’d previously been doing the long way round! The business is a partnership so I don’t know about the income tax estimate (I’d been putting aside the VAT charged plus a third of the balance from everything we were paid). I’ll have a look at that & if necessary follow your suggestion of another account in QF.
No problem, admittedly the NIC contributions would be a little trickier to report on than VAT. You could look at a recurring journal that moves x amount every month/quarter from one bank account to another. I’d suggest experimenting, you can always clear your account later when you need to input real data.
Do you mean the extra account on QF or the entire set of QF records for the business? I thought it would be easier to learn as I went along, using real-life transactions, but now I wonder whether I’ve approached the whole Quickfile set-up process the wrong way round! I don’t really want to clear the whole thing off & start again as I’ve spent hours inputting data (all my previous records were on very basic spreadsheets I’d made up).
This is becoming another topic so I’ll start a new one!
Oh sorry, I didn’t mean to confuse things…learning as you go is absolutely fine! I was just proposing it as an option but if you’ve already committed real data it’s not relevant.
Let us know if you need further assistance.
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