Accounting question re tax refund

Doug Laidlaw laidlaws at hotkey.net.au
Wed Jun 4 10:28:19 EDT 2008


On Monday 19 May 2008 10:26:34 pm Bob Williams wrote:
> I overpaid my income tax and HM Revenue and Customs has kindly sent me a
> cheque. Would you advise me to record this as a negative value in
> Expenses:Income Tax or income in Income:Other Income?
>
> The money isn't actually income, I just accidentally "lent" it to the
> taxman ;). Likewise, it's not tax either, as I should never have sent to
> said taxman in the first place.
>
> I realise that this is an arbitrary decision, but I'd be interested in
> hearing what others have done in this situation.

I never knew what to do with it.  If you show it as an Expense, it will affect 
the following year's profit, but the taxman won't allow it as a business 
expense.  One way was to create a Provision for Income Tax, which is a 
liability.  Then your refund would go there, and from there to Equity or 
Capital.

Doug.


More information about the gnucash-user mailing list