Frequently Asked Questions
How do I enter my sales that are "taxed at source" so I don't charge VAT?
Last Updated 7 years ago
If you need to record the taxes that were deducted at source you can set up a levy in the sales tax section of the Bookkeeping4 program (available in both Standard and Pro editions)
For example: If you charge £100 and there is £20 taxes, normally you would charge £120 however if the taxes are withheld then you will only charge the £100 and the £20 will be collected/remitted by the customer.
To achieve this you set up a levy in the sales tax codes section for 20% and set up a revenue account for the levy collected account and an expense account for the levy expense account.
Then when you invoice someone you use the levy as the tax code. In the example you invoice the £100 and on the profit and loss statement it shows income of £100, taxes collected at source of £20, and taxed expense of £20 so that your net profit is £100. This allows you to see the taxes that have been withheld which you might need to record on your filings with your tax office/revenue office. The levy will also appear on the consolidated tax statement which is the report that you generally use to prepare your VAT returns.
For example: If you charge £100 and there is £20 taxes, normally you would charge £120 however if the taxes are withheld then you will only charge the £100 and the £20 will be collected/remitted by the customer.
To achieve this you set up a levy in the sales tax codes section for 20% and set up a revenue account for the levy collected account and an expense account for the levy expense account.
Then when you invoice someone you use the levy as the tax code. In the example you invoice the £100 and on the profit and loss statement it shows income of £100, taxes collected at source of £20, and taxed expense of £20 so that your net profit is £100. This allows you to see the taxes that have been withheld which you might need to record on your filings with your tax office/revenue office. The levy will also appear on the consolidated tax statement which is the report that you generally use to prepare your VAT returns.