Council Tax

[Jean-David Beyer]

Neil Williams wrote:
> 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.

I do not think of Liability as you do.

For me, it is a known expense (e.g., for merchandise received, or services 
rendered) that need not be paid all at once in the near future (so is not 
accounts payable). An insurance bill that you may elect to pay all at 
once, but have the option to pay quarterly, might be a liability. You 
could argue that that is money you borrowed, but I would not.

> 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.
> 
> 
> 
> 
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