Good morning everyone, I hope someone can help me.I am using sage line 50.
On the bank statement, here is a money transfer between 2 bank account with ref: Tax retainer. (the transfer is made for putting money aside to pay my tax bill.)
I need to open new nominal code for HMRC. Because my accountant want to see this transaction in the nominal ledger. But if I open new nominal code for hmrc and post this transaction how can I deal with bank reconcilation? Also which nominal code I have to open for this? (which range?)
I think from what you've said, all that has happened at present is a transfer from one bank account in the companies name to another bank account in the same companies name - which they have decided to reference as "tax retainer". If this is the case, you just need to use/open another ledger in the bank accounts (12XX), reference this new account as "tax retainer" and transfer the money between the two accounts. This will enable you to reconcile the bank account.
If this isn't what's happened and the money has actually left your company and gone to HMRC, then that is completely different and would need to be recorded under the nominal code for whatever type of tax has been paid - ie VAT, corporation, PAYE etc.
In banking terms these are known as buckets. linked accounts for specific purposes. In this case paying a tax bill.
The confussion though is that you are transferring money around but the reality is that it's not actually paying anything yet. Just being stored away.
You are overcomplicating thinking a little in that you assume that the amount is something to do with it's final goal whereas the reality is that all that you are really doing is moving money around current account the same as people hive money away to deposit accounts to earn a bit of interest before it's needed.
I'll leave it to others to tell you how to do that with Sage. But the reality is that you've just put money in a bucket until it's needed.
The reason that your accountant is suggesting another nominal code for this is just to show the tranfers to the other account. This is not money that will appear anywhere else in the accounts.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
