Self- assessment tax, how do I categorise payments i have made to HMRC?

Hi Mon-Gella

Payments to HMRC for self-assessment tax are personal expenditure. The category will depend on the business type:

Limited company - categorise as director's current account.

Soletrader - categorise as drawings.

Partnership - categorise as member's drawings for the relevant partner.

Hope this helps.

Thank you David, that’s the most help I’ve had in the last 6 hours of QB chat with advisers! I’m a sole trader. I pay my tax from my personal money. I have one bank account and it includes mixed business and personal transactions. So I’d ‘exclude’ payments to HMRC then? But why does QBO provide a category for VAT payments  but not self assessment payments? Both would be treated the same, in that they’re paid from personal monies….?

If you did not pay the self assessment tax from the bank account linked to QB then, yes, you can exclude the payment from your QB records.

Had you made the payment from your bank account linked to QB you would categorise the payment as drawings because it is personal and also helps to reconcile your bank account.

QB does not automatically create an account for self assessment tax because it is a personal tax and not tax deductible. For that reason it does not need to be tracked to arrive at your profit or loss for the year.

VAT is a business tax. It is paid out of the money you collect from your customers. QB provides an account for VAT because you will want to keep track of what you owe HMRC for VAT.

Kind regards

Thank you again, David. Your second paragraph is relevant to my situation. Thus my payments to HMRC for tax are ‘drawings’ (ie personal expenditure). My bank account linked to QB contains both business and personal transactions, so I’d just ‘exclude’ this payment to HMRC. Just like I exclude payments for groceries, haircuts etc. Many thanks.