How to pay a Sales Tax invoice?

[Maf. King]

On Monday, 30 January 2017 11:13:17 GMT Nelson Handcock wrote:
> Hi,
> 
> Bumping my question - still stuck with this....
> 
> Thanks & Regards,
> 
> Nelson Handcock


Hi Nelson,

I was going to reply to your original post with a UK-centric viewpoint, but 
Geert beat me to it and i thought i wouldn't be adding much to his reply.

Here, we have VAT, which sounds similar to your GST in as much as you charge 
some on your invoices, you pay some with your bills, and quarterly, you report 
and hand the difference over to the taxman.

IMHO, the calculation for the taxman doesn't give rise to a new invoice (in 
the GC sense of the word, needing a supplier and A/P accounts etc.)  What you 
have is effectively a statement of facts, with a bottom line of  "pay us $x 
now"

The tax demand is asking for the money that belongs to the government, which 
you have collected on their behalf along with your invoices.  Yes, you can 
offset the bits you have paid out to your suppliers, but in effect what they 
are asking for has never been yours; you have been "keeping it safe" for them.

So I create a "manual transaction" from the bank account, with (at least) 3 
splits, not an "AP transaction".  This transaction reduces the bank balance by 
the total that is due to the tax dept, and at the same time zeroes out the 
"Tax Collected" and "tax paid" accounts.  The GC transaction should balance, 
as Tax Collected - Tax paid = tax due from bank account

That's how I do it in the UK.  YMMV, of course.

HTH,
Maf.