Recording Witholding Tax (or Schedular payments)

Options
Kieran Thomas
Kieran Thomas Member Posts: 2 ✭
edited April 2020 in Reckon One
I am a self employed contractor who has witholding tax (or Schedular payments) deducted from my invoice before payment. If I leave the invoice value as the full amount it will not reconcile in my bank accounts and I still need to be able to record my schedular tax and full amount of income. So my question is: How can I enter this into my Invoice/accounts without: a) reducing my overall income, and b)recording how much WHT I have paid.

Comments

  • Kwikbooks (Professional Partner)
    Kwikbooks (Professional Partner) Member Posts: 824 ✭✭✭
    edited April 2020
    Options
    Hi Kieran

    Raise the invoice for the full amount as usual, tracked to an income account.

    Set up a new item code call tax - tracked to an asset account 'income tax Paid' (or similar)

    Raise a credit note for the amount of tax deducted from your invoice using the tax item code- then apply the credit note to the invoice.  The invoice will be paid in full by the net payment from the customer and the tax will be tracked as well.


  • Jen_7630560
    Jen_7630560 Member Posts: 12 ✭
    edited April 2020
    Options
    I'm new to Reckon One, but in other software I would have 2 transactions - the invoice payment deposit, and a 'spend money' or 'write cheque' allocated to the WHT Asset Account. Then I would reconciled the one bank line, which is the net of the two, against those 2 transactions. I'm still getting used to Reckon One and would be keen to know how you reconcile multiple transactions against a single bank line?
  • Kwikbooks (Professional Partner)
    Kwikbooks (Professional Partner) Member Posts: 824 ✭✭✭
    edited December 2016
    Options
    Hi Jen

    Not sure what software you were using but that would be an extreme messy way to have to enter.  You are making 2 false entries (one for full amount of payment received against the invoice + a false payment made to ATO) - it would work by ticking both in bank rec, but for audit purposes it would be a mindfield as there is no record of what you are trying to do.

    Invoice & credit note stating it was a reduction for tax deduction leaves a clear record anyone can follow.

    Probably just as well you are now using Reckon One
  • Jen_7630560
    Jen_7630560 Member Posts: 12 ✭
    edited August 2016
    Options
    Eek yes i see the problem my solution! Gosh I think it's been too long since I've had to deal with VWT! :-O Thanks for the correction Kwikbooks :-)
  • Kieran Thomas
    Kieran Thomas Member Posts: 2 ✭
    edited August 2016
    Options
    That is great, thanks for your help! 

Categories