Paying HMRC

Hello Ayjay, thanks for reaching out to the Community. More information can be found here on the categories for the Self Employed expenses. If it's not to be included as not an allowable/disallowable expense on the self-assessment then you could exclude it. It is worth confirming with your accountant.

Thanks Emma, I do my own books and tax return. It's why I signed up to QBSE in the first place. This is one of the only things I don't quite get about the system. QBSE is about helping self employed keep track of books and that should include the ultimate aim; a tax payment. In my mind there should be something that allows one to flag a tax payment to HMRC as exactly that, partly so it isn't included in the next year's expenditure, and so one can see easily when tax was paid. 

Am I just blind? So far in previous tax years I've marked the payments going out my account as exempt from current tax year calculations as they are in fact tax from the previous years.

Can someone please clarify how you reconcile your payment to the HMRC, for your self employed Tax return (self assessment)? There is no liability account for Income Tax/NI? There is a CIS suffered, and a VAT Suspense account, but nothing for Tax? 

We have CIS suffered so i cannot just exclude this from my bank transactions, i need to credit part of it to CIS suffered to clear this down. But then how do i post the balance to Tax? 

Hello Rachel Elverstone, 

Welcome to the Community page, 

Are you wanting to know how to account for a payment to HMRC? If so then you would class this as taxes and this would be allocated to disallowable under other business expenses in box 45.  

I have only the simple package, and have filed my self assessment online with the HMRC. I do not have an account named Taxes? I have a VAT liability account, and also CIS, but nothing for Taxes payable to HMRC? So in my bank reconciliation screen, when receiving my Tax refund from HMRC in the coming days, some of it needs to credit the CIS suffered account, and then the balance needs to go to Taxes. But i do not have an account for this? Is this an account we have to create in the chart of accounts? 

Hi, @Rachel Elverstone.

I appreciate you for getting back to us here on the Community page. I'm happy to share with you some information about managing and classifying transactions in QuickBooks Self-Employed.

QBSE is compliant with the categories provided by the HMRC. The categories provided by them are what QuickBooks follows. Thus, you don't need to create or set up any extra accounts to categorise your transactions. For additional reference about these categories, read these articles:

• About SA103F Categories
• Categories in QuickBooks Self-Employed

On the other hand, if you're using QuickBooks Online, here's how you can learn more about adding and modifying accounts.

Moreover, you can check out the topics from these articles for more hints about reconciling accounts in QBO:

• Reconcile an account in QuickBooks Online
• Learn the reconcile workflow in QuickBooks

If you have any other questions about QuickBooks or managing your taxes, please let me know by adding a comment below. I'm always here to help. Keep safe!

Hi

I have read various threads now, in an attempt to ascertain how to record payments to HMRC in QBSE. It seems there is no obvious solution offered within the QBSE system, (unless it has been added very recently?).

I have to say I am in complete agreement with others that have made the same point. UK Sole traders typically pay their tax bill from their business account, and as such wish to categorise it as 'Tax' or 'HMRC' or similar. It should NOT then be recorded as an expense. This throws out all the calculations for proft and loss. Yet, the category named 'Tax' is there to select and does exactly that, records an expense. Surely it would be possible to adjust this so that it becomes a useful feature rather than a confounding drawback of QBSE for the UK sole traders like myself that simply wish to sleep at night assured that their books are being kept up to date for submission when the time comes. I look forward to your advice.

Hello JokaDesign, thanks for commenting on this thread, we have taken on board what you have said, you can catergories the payment for HMRC as taxes and this would be allocated to disallowable under other business expenses and under the box 45 section on the form you fill out for your self assessment. 

When you say "...would be allocated to disallowable under other business expenses..." do you mean it would happen automatically? I.e. would it be possible for the entry to automatically be discounted from the expenses total? As I understand it this is not currently possible, but I'd appreciate confirmation of this. In which case it is necessary to ignore the totals as reported in QBSE and manually adjust the figures on the return. Sorry, but in every thread I've read so far, this objection seems to be dismissed as if it's unimportant or even unreasonable. I think we deserve a more serious and practical response and solution. Looking forward to this.:crossed_fingers:

Hi JokaDesign,

Transactions are automatically put under disallowable or allowance expenses based on the category you choose. Please refer to this article: Self-employed business expenses - all you need to know. It talks about allowable expenses with sample categories. Therefore those that are not mentioned could be considered disallowable.

As for your question about removing the tax payment from your total expense in your Profit and Loss, I would suggest calling your QuickBooks Self-Employed Support about it. That way, they can use a screen-sharing tool to check the flow of your transactions on reports.

You can go back to this thread if you have other questions.

hello, the link you have provided to the QBSE categories goes to the US site (https://quickbooks.intuit.com/learn-support/en-us/chart-of-accounts/categories-in-quickbooks-self-em...). 

is there a UK based page? some of the US categories don't map across to HMRC categories.

Thanks

Hello, QBSE desktop (not mobile) seems to be splitting expenses listed under the SAME category into allowed & dis-allowed. is there some sort of algorithm going on? if so how can I over-ride it?

Also car expenses are allowed under HMRC but again, QBSE seems to be deciding they're dis-allowed. Not sure what's going on!

Thanks

Hello Clareschilies, here is a link that maybe helpful for you. So it could be down to simpliefied expenses as QBSE uses simplified expenses  if you have hours from home filled in on the tax profile this would impacted the latter. This link here also explains more. 

thank you. Simplified expenses is not the approach required for my business. so I guess I can't turn that off? 

my work from home hours are small as I'm out working a lot.

If you could recommend a way of circumnavigating the Simplified expenses 'feature' I would be grateful.

In the mean time I'll try playing around with the hours so see the effect.

Thanks

Hello again, thanks I do have this page.

What I am trying to establish is

1. exactly what your categories map to under the HMRC categories. I used to use SAGE a few years ago and that have a PDF mapping across. I cannot locate the equivalent for QBSE or indeed QB.

2. to understand why business car insurance and parking, which ARE allowed in HMRC show as DIS-ALLOWED in QBSE. 

Thanks

Hello Clareschillies, if you have a look at this like of categories it tells you what boxes it hits and what it includes and what is not. 

Quickbooks Self employed uses the simplified method as default so there is not a way to change that, you could depending on the category, a work around for example not put hours in working from home so it does not calculate simplified when adds a transaction under the home category for example for other categories it would be calculating and adding the actual figure to the sa103f if you are using the other method.