Automatically splitting incoming money?

Terry Boon terry@counterfactual.org
Tue, 10 Oct 2000 18:27:14 +0100


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On Tue, Oct 10, 2000 at 08:24:13AM -0500, Bill Gribble wrote:

> Robert, you've mentioned before that GST is somehow qualitatively
> different from other kinds of taxes.  Could you explain how?  I would
> assume that you would just want an Expense account called GST, which
> would be the account for a split in each transaction that has a GST
> component.  Is there some reason that's not adequate?

Well, I'm not Robert, and I don't deal with GST, but I'll speculate
anyway (based on a knowledge of the UK VAT system):

VAT is charged on a constant rate on sales (OK, there are three rates
- -- standard, reduced, and zero -- but that adds minimal complication).

If I sold something, I'd need to make a journal entry of the form

Dr Cash                       X
   Cr Sales (standard rated)       X
   Cr VAT creditor                 X

and if I bought something, I'd make a journal entry:

Dr Purchases (standard rated) X
   Cr Cash                         X
   Cr VAT creditor                 X

The cash:VAT creditor ratio is constant (at 47:7), so it could be
convenient if Gnucash could calculate the split automatically.
(Whether that's what the other correspondents had in mind, I don't
know.)

I'd be able to use a similar facility to set up automatic provisions
(liabilities) for income tax and National Insurance contributions (at
the appropriate marginal rate) when my gross overtime for each month
appears on my payslip.  (My payroll service don't calculate it until
one actually claims the money, but I like to have the asset and the
corresponding liabilities on my balance sheet.)

Actually, that would ideally need a journal entry of the form

Dr Unclaimed overtime    X
   Cr Overtime income        X

to trigger the creation of

Dr Tax expense accrual   X
   Cr Tax provision          X

where the balances in the second transaction would be proportional to
the first, but that's rather more complex (I presume) than the initial
request.

Best wishes,
Terry Boon
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