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dclay.building
Level 1

I have a question about how to record an income tax payment? I didn’t have the funds to pay HMRC in January 2020 for accounts 2018-2019 i am paying instalment now monthly

 
5 REPLIES 5
Ryan_M
QuickBooks Team

I have a question about how to record an income tax payment? I didn’t have the funds to pay HMRC in January 2020 for accounts 2018-2019 i am paying instalment now monthly

Hi @dclay.building,

 

I'll take care of your query about recording payment for your payroll liabilities. 

 

In Quickbooks Online (QBO), the system will record your liabilities for these payments to either Payroll LiabilitiesHMRC or Tax and National Insurance.

 

After you paid HMRC the payroll liabilities, you'll need to create an expense within QBO. Use the account that has a balance on it. You can view it either from the Chart of Accounts, or run the Balance Sheet report. 

 

If you have other queries about QBO Standard Payroll, see this article: QuickBooks Online Standard Payroll Hub. It's a list of all articles related to this payroll service.

 

I'll be around in case you need further assistance. Place a comment below, and I'll get back to you. 

dclay.building
Level 1

I have a question about how to record an income tax payment? I didn’t have the funds to pay HMRC in January 2020 for accounts 2018-2019 i am paying instalment now monthly

Thanks for the quick reply.  Ok so there is a category under expenses as ‘tax paid‘. Is this right even though the tax is owed for a previous year? Because if I put it under expenses it’s going to get taken off my gross profit. It’s good because I’ll pay less tax next year but just want to make sure I’m categorising it correctly. 

SarahannC
Moderator

I have a question about how to record an income tax payment? I didn’t have the funds to pay HMRC in January 2020 for accounts 2018-2019 i am paying instalment now monthly

Hi there, dclay.building.

 

It sounds good to pay less tax next year when recording the payment as an expense within QuickBooks. I'd be glad to share some information in regards to your concern.
 

What my colleague shared above will help you record the tax payment. With that, we can continue his suggestion. However, it would be better to reach out to your accountant to make sure that everything is accurate and properly set up for your tax payment. They are the ones who take charge of explaining thorough and might share another way of tracking the tax payment in QBO.

 

From time to time, you can always check out these articles where the detailed steps on how to create an expense account as well as recording the payment within QuickBooks can be found:

 

 

If you require additional information, please let us know. We are all right here to assist you further. Keep safe!

campbeji
Level 1

I have a question about how to record an income tax payment? I didn’t have the funds to pay HMRC in January 2020 for accounts 2018-2019 i am paying instalment now monthly

Sorry, but as far as I know the payments you make to HMRC are not tax-deductible. so can not be entered as expenses.  If you think about it the tax is what you pay on the profits after all of your expenses have been paid.

If you process as an expense and your accounts get looked at by HMRC you could end up with a fine.

Good Luck

Jim

tobijenkins1980
Level 2

I have a question about how to record an income tax payment? I didn’t have the funds to pay HMRC in January 2020 for accounts 2018-2019 i am paying instalment now monthly

Was there ever an answer to this question? I have a similar problem in that I am trying to record a payment to HMRC for income tax but finding it impossible to categorise it without it becoming an expense that effects my profit and loss. Im surprised QBO doesn't have a simple labelling item for recording paying taxes to HMRC.