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What do I categorise this tax as?
What do I categorise the tax that is taken via my business bank account? I.e. not the Self Assessment Tax payments, the other payments made based on the amount within the account
I’m confused
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Hi Isabel,
Stuart is quite right.
For example:
Your bank statement shows gross interest of #2.00 with tax deducted #0.40, leaving a net receipt of #1.60.
You'd just explain the #1.60 receipt as interest.
I hope that helps but please do ask if you get stuck again.
Kind regards,
Emily
The company says
this answers the question
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Inappropriate?Hi Chris,
When explaining a bank transaction, from the Category drop down you'll see options for Corporation Tax, VAT and PAYE/NI. By selecting any of these (depending on which type of tax you're referring to), FreeAgent will then automatically adjust the accounts accordingly.
I’m happy
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Inappropriate?Thanks Olly. Unfortunately Im still not clear what to classify this as.
Let me try and explain my situation again:
I have a business back account, and (with the same back) a "business reserve" account that I use to store my money for future tax payments.
In the business reserve/savings account, each month I get charged Tax on Credit interest.
I.e. I get taxed on the money in my bank account. What do I classify this as in FreeAgent?
I’m confused
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Inappropriate?Hi Chris,
I assume you are a sole trader, you would be best to account for the net interest after the tax has been deducted.
Phil
I’m happy
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Inappropriate?Hi,
I'm still a bit confused by this. I have the same question as Chris but I'm a limited company. Monthly my business account listed something like "INTEREST PAID AFTER TAX 0.04 DEDUCTED", then credits me my interest. Do I need to list this deducted tax anywhere and if so, which category?
thanks,
isabel -
Inappropriate?Hello,
No, you'd just need to record the net interest received by your company - you don't have to worry about recording gross interest less tax deducted.
When you explain the receipt, use type "Other Money In", and category "Interest Received".
Kind regards,
Emily -
Inappropriate?Hi Emily,
The interest received is part of my bank statement, I'm just wondering if I need to record the tax deducted on that interest on a separate line because the line on my statement says '...AFTER TAX £x.xx DEDUCTED'
thanks,
isabel -
Inappropriate?No Isabel, just enter the net amount. FreeAgent sorts out the tax position. -
Inappropriate?Hi Isabel,
Stuart is quite right.
For example:
Your bank statement shows gross interest of #2.00 with tax deducted #0.40, leaving a net receipt of #1.60.
You'd just explain the #1.60 receipt as interest.
I hope that helps but please do ask if you get stuck again.
Kind regards,
Emily
The company says
this answers the question
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Inappropriate?Cool. That's what I had been doing. Just wanted to make sure it was correct.
Thanks everyone!
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