Council Tax

[Neil Williams]

On Thursday 10 March 2005 8:03 pm, Tom Haskins-Vaughan wrote:
> > Annual or monthly, it's still an expense. How do you record your car tax?
> > Your Income Tax? You don't owe income tax until you receive income. You
> > aren't borrowing money from the government and then having to pay it
> > back.
>
> I think the reason I want to use a Liability account is so that I always
>   know how much I owe.

You don't owe a penny, provided you are not in arrears.

Make each payment as it falls due (scheduled transaction) and you will never 
owe a penny in Council Tax.

What you mean is how much you've got left to pay - not the same as what you 
owe. If you plan on staying in the same house and don't plan on gaining / 
surrendering single person status, it is the same as last month. You don't 
owe the full annual amount, that's just an interim assessment. You only pay 
what is payable that month - that's how you get two months free. Every month 
of the first 10 of each year, you have to pay £x in Council Tax. 

You have got as much Council Tax left to pay as there are months left in that 
house or months left in your life as a whole. Indeterminate. However, you do 
not OWE any Council Tax unless you are in arrears.

If you want to be really picky (or if you plan on having Council Tax 
arrears!), transfer the amount of the payment to Expenses:Tax:Local Tax from 
Liability:Arrears every month of the first 10 and then pay Liability:Arrears! 
It still won't get you a reducing balance.

>   But for the initial payment on the first of April 
> I will have an expense account Expense:Tax:Council Tax.
>
> I can see what you mean about it only being a monthly payment. I guess I
> just like the idea of my Liability account being decreased over the year
> rather the expense account being increased.

You're confusing the term of the assessment with the term of the bill. Council 
Tax is ongoing - until your circumstances change, it will remain. The bill is 
therefore ongoing and all you get each year is a statement saying that your 
payment will be £x. 

> Purely psychological :) 

That would be a false decrease - instead concentrate on reducing your 
outstanding mortgage etc. After all, paying your Council Tax earlier won't 
reduce your total bill - paying your mortgage off earlier will significantly 
cut the overall bill. That is a liability WORTH reducing.

-- 

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