How to pay a Sales Tax invoice?

[Christopher Lam]

Hi

I'm like you in Australia. I work via a service company, who sends me
regular Recipient-Created Tax Invoices... and I pay them a percentage of
the income that I generate, plus GST. Let's say I generate an income of
$1000, plus $100 GST... and I pay them 30%+GST ie $300+$30GST. I receive
1100-330 = $770 into bank.

My payslips are recorded as follows:
- Income:Sales $1000
- Liability:GST:Collected $100
- Expenses:ServiceFee -$300
- Liabiliy:GST:Paid -$30
- Assets:Bank $770

While completing my BAS, I'll be owing the ATO 100-70 = $30. I personally
record this as a separate account:
- Assets:Bank -$70
- Liability:GST:BAS $70

Hence I use a 3-account structure as suggested by
https://wiki.gnucash.org/wiki/Alternate_Australian_GST_setup --
Liability:GST:Paid
Liability:GST:Collected
Liability:GST:BAS

(PS to complicate matters further, during quarterly BAS they'll also take
PAYG Income Tax. Hence, assuming I pay $40000 tax per year:
- Assets:Bank -$10070
- Liability:GST:BAS $70
- Expenses:ATO:Income Tax $10000)

The Liability:GST parent account will show, live, the amount owed to ATO.
Does this help?

On 30 January 2017 at 09:13, Nelson Handcock <nelson.handcock at gmail.com>
wrote:

> Hi,
>
> Bumping my question - still stuck with this....
>
> Thanks & Regards,
>
> Nelson Handcock
> 0409 149919
>
> http://www.linkedin.com/in/nelsonhandcockaustralia
>
> On Sun, Jan 22, 2017 at 7:37 AM, Nelson Handcock <
> nelson.handcock at gmail.com>
> wrote:
>
> > Hi,
> >
> > I'm using GN 2.6.12....
> >
> > I've just started using the Sales Tax Tables feature for the first time,
> > and I've found the online forums on the subject quite helpful, but I just
> > can't quite get my head around the complete picture - I'm hoping I can
> get
> > some extra advice to fill in the gaps.
> >
> > FWIW - this is the link I found that seemed to have most information.
> >
> > http://gnucash.1415818.n4.nabble.com/Sales-Tax-with-GnuCash-
> td1435137.html
> >
> >
> > I have a GST Liability Account that has a "Tax on Purchases" and and "Tax
> > of Sales" sub-account, and the net Tax payable amount is showing on the
> > parent GST Account.
> >
> > I have posted invoices from suppliers and customers, and I can see the
> tax
> > split amounts in the GST accounts. It looks correct - if I have $1000- in
> > Tax on Purchases and $600 in Tax on Sales, the parent account shows a
> > balance of $400-.
> >
> >
> > This thread has a comment "So now you have a tax liability automatically
> > created in which you can pay whenever you need. Just move your funds from
> > the relevant asset account to extinguish the liability. "
> >
> > It's this part I am having trouble understanding. I have to pay the Tax
> > Department the balance of $400.
> >
> > Do I make manual adjusting entries? Or have I got the account settings
> > incorrect - should I be using the GST liability account directly in the
> Tax
> > Dept invoice?
> >
> > When I create an invoice for this, I can only post the invoice liability
> > to an Accounts Payable account - my GST account is not included in the
> > list. If I use the GST parent account as the Expense Account, the overall
> > balance increases to $800, rather than showing a balance of zero.
> >
> > So if I use a different Expense Account then the net liability in my GST
> > account still shows an outstanding balance of $400.
> >
> > When I pay this invoice it was debit my income account and credit my main
> > liability Accounts Payable... But this still doesn't show anything in the
> > GST liability accounts.
> >
> >
> >
> > So I'm hoping for some guidance in how to correctly pay the tax invoice
> > and have the payment also reflected in the GST Liability account.
> >
> > Thanks in advance for any guidance that can be provided....!
> >
> >
> > Nelson
> >
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