Hello everyone!
I am providing a service to a university. I invoice them monthly. They pay my tax and NI and pay me the balance straight into my bank account.
With Solar Accounts (which I have been using since I started my own business in 2006), I am able to invoice them, input the amount they pay me (minus the tax and NI) but that leaves me with an outstanding balance due on my invoice.
I've been told that I shouldn't alter my invoices to reflect the tax and NI after I have submitted them but, since I am no accountant, I don't know how to show these payments and clear the outstanding balance due on the invoice I submitted to the client.
Please help.
Hi Susan,
It sounds like you are self-employed (ie. not a limited company). In that case the tax and NI are considered a personal expense. When the university deducts the tax and NI amount from the invoice total, create an Invoice Payment for that amount with the Deposit Into Account set to 'Owners Drawings and Personal Use'.
In this way it is like you were paid the tax and NI amount but then immediately withdrew it from your business and gave it to the tax man.
Regards,
