Council Tax

[Neil Williams]

On Tuesday 08 March 2005 7:15 pm, Tom Haskins-Vaughan wrote:
> I've just got my Council Tax bill for the year 2005/2006.

(UK). So have I, plus National Insurance and a few others that work on 10 
month cycles or used fixed DD amounts. To me, these are all Expenses.

> I will be 
> paying it by direct debit over 10 months. My question is this. Because I
> know now how much I am liable for for the whole of the year do I create
> a liability account called council tax and charge it the total amount
> with the Expenses:Tax:Council tax  expense account?

A Liability is more like *money* you've received but have to pay back, not 
services. The UK Council Tax is a local tax and it (IMHO) is an Expense:Tax, 
not a liability.

If you had borrowed the money to pay your Council Tax, that borrowed money 
would be a liability.

It's not too different to budget plans and other direct debit concessions 
where you pay a fixed amount over the year and get a rebate / extra bill next 
year - like Water and other utilities.

Asset     = money you have.
Income    = money you earn.
Expense   = money you spend.
Liability = money you borrowed.
Equity    = what's left.
:-)

> This way I'll always 
> know how much I have left to pay i.e. the balance of the liability account.

But it's not a loan, treat it as a deduction from your monthly income - with 
two months free.


-- 

Neil Williams
=============
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