I paid voluntary national insurance last month for last years tax return. I was just wondering how to record this as it’s not an allowable expense? I don’t use payroll.

beckeeh9 · ‎February 16, 2021

Rea_M · ‎February 16, 2021

Thanks for the additional information you've provided above, @Becky93. This way, I can guide you in recording the national insurance payment in QuickBooks Online (QBO).

When you voluntarily pay the national insurance for last year's tax return and you aren't using payroll, you'll have to record it as an expense transaction in QBO. However, I'd also recommend consulting your accountant to keep your financial data accurate. Let me guide you how.

Go to the + New button
Select Expense.
Choose and/or enter all the necessary payment details (i.e Payee, Payment account, date, method, and Ref no. (optional)).
In the Category details section, enter the expense info. You have the option of expensing to a liability account if you want to set up a liability for the NI amount and then you can expense to the liability(which would then record as paid off and show on your balance sheet)
Enter the Amount and tax.
When you're done, select Save and close.
We'd recommend consulting with your accountant that they are happy with this as we're not trained accountants here.
You could also record this as a journal entry

For the step-by-step guide, you can refer to this article: Enter and manage expenses in QuickBooks Online. It also includes details about editing, reviewing, and deleting an expense transaction.

Whether you manually upload your bank transactions or use Open Banking, you'll have to match them to the existing entries (i.e., expense) in QuickBooks. This way, you're able to avoid duplicates and keep your account updated. You can refer to this article for the detailed steps: Categorise and match online bank transactions in QuickBooks Online.

Additionally, I'd recommend reconciling your accounts every month. This way, you can effectively monitor your expenses and the growth of your business. You can check out this article for the steps: Reconcile an account in QuickBooks Online.

Let me know in the comments below if you have other concerns about recording business expenses in QBO. I'm just around to help. Take care always.

View solution in original post

EmmaM · ‎February 16, 2021

Hello Beckeeh9, Are you referring to the self assessment as regards allowable expenses?Is this in the income tax section of QuickBooks Online or are you using the Self Employed product?

Becky93 · ‎February 16, 2021

Hiya, thanks for replying. Yes, I don’t want the amount to come off my profits and it shouldn’t be taxed so was unsure of how to record it as an expense without it coming off of my profits etc. I am using QuickBooks online.

Rea_M · ‎February 16, 2021

Thanks for the additional information you've provided above, @Becky93. This way, I can guide you in recording the national insurance payment in QuickBooks Online (QBO).

When you voluntarily pay the national insurance for last year's tax return and you aren't using payroll, you'll have to record it as an expense transaction in QBO. However, I'd also recommend consulting your accountant to keep your financial data accurate. Let me guide you how.

Go to the + New button
Select Expense.
Choose and/or enter all the necessary payment details (i.e Payee, Payment account, date, method, and Ref no. (optional)).
In the Category details section, enter the expense info. You have the option of expensing to a liability account if you want to set up a liability for the NI amount and then you can expense to the liability(which would then record as paid off and show on your balance sheet)
Enter the Amount and tax.
When you're done, select Save and close.
We'd recommend consulting with your accountant that they are happy with this as we're not trained accountants here.
You could also record this as a journal entry

For the step-by-step guide, you can refer to this article: Enter and manage expenses in QuickBooks Online. It also includes details about editing, reviewing, and deleting an expense transaction.

Whether you manually upload your bank transactions or use Open Banking, you'll have to match them to the existing entries (i.e., expense) in QuickBooks. This way, you're able to avoid duplicates and keep your account updated. You can refer to this article for the detailed steps: Categorise and match online bank transactions in QuickBooks Online.

Additionally, I'd recommend reconciling your accounts every month. This way, you can effectively monitor your expenses and the growth of your business. You can check out this article for the steps: Reconcile an account in QuickBooks Online.

Let me know in the comments below if you have other concerns about recording business expenses in QBO. I'm just around to help. Take care always.

Topics

Training

Community

Resources

I paid voluntary national insurance last month for last years tax return. I was just wondering how to record this as it’s not an allowable expense? I don’t use payroll.