recording tax and ni paid at the end of year

Lina

Hi everyone,

This is the second year, when i prepare Ltd and Se. I am not sure, how to record tax and NI paid for Se and tax paid for Ltd.
Lets say my client's se profit was 25,000 for 07/08, he had to pay nino
of 1,582.00 and tax of 4,082.90. How do i adjust these amounts? I use QB software to input all data, then i prepare tax return using tax calc. So at the moment tax and nino is not shown in QB. I am obviously lacking knowledge on this one, as i have been thinking hard, but i could not think of the right solution. :confused1:
The same goes for Ltd, i prepare everything in QB up to trial balance, then i calculate tax manualy. How to record it In QB? Thank you:001_smile:

qwerty

Hi Lina

The personal Tax and NI payments for a self employed person is a personal expense and not a business expense. As such, if they are paid from the business bank account, the payments would be posted to drawings - they do not appear in the accounts.

For Limited companies, you would make a provision for corporation tax payable at the period end, so:
Dr Corporation Tax payable
Cr Corporation Tax creditor

I hope you do not take this the wrong way, or take offence, but the above are very basic matters when dealing with clients' accounts and tax affairs. When I hear people asking such basic questions it makes me wonder if they should really be preparing the accounts and tax returns for their clients!

Lina

Thanks for your answer.

I knew that se tax and nino is personal expence, but i though it still has to be shown somwere.

Regards to not knowing simple things, i can say that most of the time this is exactly what i think about most of the posts in this forum :huh:. But also what i think is: that some of us are better in some areas, the others in other areas, and what looked to me confusing, looked very simple to you. So i think that all of us are not 100% and that is why there is such a forum. :ohmy: