Hi - just noticed my entries for the years 2012-2016 for corporation tax and company NI contributions was set to "Income Tax and NI Liability", which looking at the forum, is actually for employees.

Since then I've not drawn a salary, so this is historical data only. The company is "almost dormant", just ticking over until I get a new contract or find other use for the company.

Just changing accountants, and noticed this historical data is appearing as a liability of -£10,136.65 (i.e. an asset) which of course, rather confuses the current reports.

What's the simplest way of resolving this, e.g. a balancing charge I can add to counter this "negative liability"? Since that date there has been no corporation tax, salary or NI. All the taxes have been paid.

Hi CMB,

Sorry for the late reply. It sounds like you should credit your "Income Tax and NI Liability" by £10,136.65 - create a General Transaction dated at the end of your previous financial year with the From Account set to "Income Tax and NI Liability". However, I'm not familiar enough with your accounts to know what account to debit - please ask your accountant what account should be debited and set this to be the To Account in the General Transaction.

Regards,

Thanks, followed you advice. I made a general transaction from "Income Tax and NI Liability" to "Tax Expense" for the last date of the financial year, and that did the trick.

My understanding now is that "Income Tax and NI Liability" is PAYE on behalf of the employees, and so is normally balanced by taking it off their pay. I was using it for employer NI, which is a simple tax expense. So rectifying it by charging it in one lump to "Tax Expense" would appear appropriate.