Recording tax payment to HMRC in accounts


I am registered as a sole trader and was wondering how I tag a payment of tax I made to HMRC from my business account for the last financial year.

I have tried searching for the answer but cannot find one.

When I go to tag the payment and click ‘Tax payment to HMRC’ it gives the options shown in the picture below, however I don’t think it comes under either of these categories?

Should a payment of tax be counted as an expense? I would assume that it shouldn’t.

Any help on how to correctly tag this would be much appreciated.

Kind regards,

Hi @tttwb

As a sole trader, tax payments such as income tax, NI etc aren’t classified as allowable expenses as they’re technically for you personally rather than the business.

You can simply tag these as drawings.

There’s more detail available here:

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