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• # 72163
• Tue 14 Jun 2011 10:43 AM

could anyone please offer me some advice.

i have a sole trader,

who has had a tax rebate from a previous accounting period.

i have made the following entries into sage

bank receipt    - bank         1200   DR entry
                          taxation    2210  CR entry

when i look at the balance sheet for the current financial year it shows as a Current Liability.

is anyone able to tell me how to correct this as i can't imagine a tax rebate would be a liability.

thank you Rachel

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• # 72166
• Tue 14 Jun 2011 11:11 AM

Hi Rachel

Have you checked the nominal record activity for the taxation code?

What exactly is showing on the Balance Sheet? e.g. Is there a column showing the period and another showing the year to date figures?

The taxation code is listed under current liability and the rebate would be in there but it might show as a negative but then it all depends if there are any other entries on the sheet relating to that year - if you add up the record you should get the right balance.

Does any of this make sense. - reading it back Ive confused myself!

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• # 72174
• Tue 14 Jun 2011 01:32 PM

Hi Rachel
As it's a sole trader I wouldn't put the rebate there as the business isn't taxed, just the proprietor. In this case I would put the rebate against their drawings (so it would show up as a reduction of their drawings) or as a captal injection. Not sure as to the nominal code, but debit the tax account & credit drawings.
Regards
Sadie

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• # 72176
• Tue 14 Jun 2011 01:46 PM

thank you very much for your help,

i feel a lot less confused now.

rachel

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