I received VAT repayment supplement from HMRC as they were late in paying our VAT. I understand this payment is exempt from Corporation Tax.
How do I tag the credit to the bank account and record this payment so it does not or part of our taxable income?
Thank you in advance for your assistance.
Hi @samppatel
I think the best way to approach this at the moment is to tag the money into your bank account as a refund from HMRC (VAT Liability), and then journal the value to Misc Income or even a custom nominal code to keep it separate. It would then need to be posted as a deduction when the accounts are filed.
I would recommend raising this with your accountant at year end to ensure this is recorded correctly.