On Jan 12, 2008 9:57 AM, <
..hidden..> wrote:
Hi List,
Been meaning to query this for a while, but I keep forgetting.
The PAYE and National Insurance account (2210) is set up as an asset.
Since the money that goes into this account is not actually owned by
the business, but is held in trust for Her Majesty's Revenue and
Customs, should it be a liability instead?
I would need more information in how the transactions hit these accounts to make an opinion.
In general, if you look at VAT, the way it generally works is:
Money gets stored in appropriate cash accounts (assets)
The portion held in trust gets tracked in the appropriate VAT liability account.
When you pay the taxes, you issue a GL transaction which cancells out the VAT debt and pays it with the cash account.
I don't know if the same framework works here, but if money is stored in say a bank account, but some of it is held in trust, that would be the model I would suggest.
IANACPA, etc....
Best Wishes,
Chris Travers