Hi. I am doing accounts for year ending October 2017. I have recorded Corporation Tax Liability paid on 31/7/2017. This now reduces my net profit for year end 31/10/2017. This cannot be right?
Hi Paul,
It sounds like the tax you are paying is based on the previous year's net income (ie. the profit your company generated for the year ending 31/10/2016).
In that case you should create a Money Paid Out transaction from the Cheque Account to the Corporation Tax Liability account as shown at the bottom of this page:
https://www.solaraccounts.co.uk/help/how-to-record-an-annual-tax-liability.php
This transaction will not affect your profit for the year ending 31/10/2017 because it does not involve an income or expense account.
Regards,
