# Record a Tax Payment

Four steps, in order.

The last one is the one people forget, and it is the one that tells you whether the other three worked.

![The Unpaid / Unclaimed tab of Tax Payments, which is where a submitted return waits to be paid or claimed, beside the Payment History tab that keeps what has already settled.](https://www.sorviai.com/help/tax-payments/tax-payments-screen.png)

*A payment is recorded against the return that created the obligation, not as a loose bank entry.*

## Partial and late payments

| Case | How to record it |
| --- | --- |
| Paid in instalments | One tax payment per instalment against the same period |
| Paid late with interest | The tax as a tax payment, the interest as an expense |
| Penalty charged | An expense. It is not tax and is usually not deductible |
| Refund offset against next period | Record the offset rather than a cash refund |
| Refund received short | Record what arrived, then find out why before assuming an error |

> **Note:**
>
> **Interest and penalties are not tax**
>
> Coding them as tax distorts your next return, because they were never output or input tax. They are expenses, and most jurisdictions treat penalties as non-deductible ones.

## Direct debits and offsets

A tax authority taking payment by direct debit is still a payment you record, on the date it left. An authority offsetting a refund against your next liability is not cash at all, and recording it as a receipt would put money in your bank that is not there.

- **Direct debit:** record on the date it cleared, from the account it left.
- **Offset:** record the offset against both periods rather than as a cash movement.
- **Payment on account:** possible and best avoided. Match it to a period as soon as one is filed.