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Introduction - Tax Payments

A tax payment records money moving between you and your tax authority for a filed period.

Recording what you paid the tax authority, and clearing the liability.

Recording it is what clears the liability from your balance sheet. Skip it and your accounts will insist you still owe tax you paid months ago.

The Tax Payments screen, described as tracking VAT payment obligations and refund claims, with tabs for Unpaid / Unclaimed and Payment History. The Unpaid tab shows an All Caught Up message explaining that there are no submitted VAT returns awaiting payment or claim, and that a return must be submitted before payments are tracked here.
Nothing appears here until a return has been submitted. Until then there is no obligation to pay against.

Payments and refunds

The direction depends on which way the period netted out. Both are recorded here and both clear the same control account.

Nothing appears on this screen until a return has been submitted. Until then there is no obligation to settle, so a finalised-but-unsubmitted return shows nothing to pay. For UK VAT the obligations and receipts are read back from HMRC, which is why what you see here should agree with your HMRC account rather than with your own notes.

Tax paymentyou owe
Output tax exceeded input tax. You send the difference to the authority and the liability clears.
Tax refundyou reclaim
Input tax exceeded output tax, typically after heavy purchasing. The authority pays you and the asset clears.

The control account

Tax on every transaction posts to a single control account as it happens. Filing does not touch it. Recording the payment is what clears it, which is why an unrecorded payment leaves a liability sitting on your balance sheet indefinitely.

  1. Transactions postTax accumulates in the control account
  2. Return filedControl account unchanged
  3. Payment recordedControl account clears

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