Reflecting Revenue’s PSWT deductions when recording payments from Public bodies

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Recording payments from Public bodies – Free Online Small Business Accounting Software Questions & Answers

Lads,
I did some work for a public eductaional organisation. For each invoice, payment was made minus the 20% PSWT rate. I then later reclaimed the withheld PSWT amount from Revenue.
In recording payment for each invoice, I set up a credit note for the PSWT amount – to at least note in the books in some way.
Is there a way to record the reclaimed amount from Reveue against the credit note? Or is there a better way to record/process PSWT payments?
Thanks
Richie

2 answers

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Brendan_Brady ⋅ Community Accountant - Brady Associates July 20, 2015
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Hi Richie
I don’t think creating a credit note to account for PSWT would be best practice, as this would reduce the value of your annual sales. You can record the payment of the invoice as two separate transactions i.e. the first payment you received for 80% and when you receive the refund from revenue, record it in bullet as a payment received from the same customer for the balance of 20%.
Hope this helps.
Brendan

#answer-1722
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funzeye July 20, 2015
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What I did for this was add another Bank Account (a fake one essentially) and call it “Professional Services Withholding Tax” and recorded the PSWT amounts in that account.

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  1. Brendan_Brady July 20, 2015
    That may work, but did revenue actually refund the 20% into your bank account? If so, how did reduce the balance in the "fake" bank account?

    Feel free to drop me a mail or give me a call.

    BB
  2. funzeye July 20, 2015
    I havent got to that point yet as it was only a recent sale! But I assume when revenue refund it I will essentially transfer the amount from the PSWT bank account to my real current account using the bank transfer option in Bullet. PSWT account will then be 0.
  3. Brendan_Brady July 20, 2015
    That's correct. Once you have reflected the bank, debtors and sales balances correctly then it's perfect.
  4. richiebowden July 20, 2015
    Brendan / Funzeye, Thanks for the feedback. Appreciate the input. Richie

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