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Rct and sage

  • 07-03-2019 12:02am
    #1
    dazzymc
    Users Awaiting Email Confirmation Posts: 104 ✭✭


    Anyone any idea what's the best way to deal with rct payments in sage?

    So basically my friend invoices businesses and they keep 20% towards future tax liabilities but he has no idea how to account for this.

    He has been marking them as a discount on the invoice. So basically, if he issues a €60 invoice to company x. Company x pays 48€ to my friend and €12 is put towards his revenue liabilities.

    Any help appreciated.


Comments

  • #2
    Paddy001
    Registered Users, Registered Users 2 Posts: 724 ✭✭✭Paddy001


    dazzymc wrote: »
    Anyone any idea what's the best way to deal with rct payments in sage?

    So basically my friend invoices businesses and they keep 20% towards future tax liabilities but he has no idea how to account for this.

    He has been marking them as a discount on the invoice. So basically, if he issues a €60 invoice to company x. Company x pays 48€ to my friend and €12 is put towards his revenue liabilities.

    Any help appreciated.

    Treating it as a discount does not work as it will go to the profit and loss account as a loss when it is not actually a loss. The debtor balances may appear correct but the profit and loss and balance sheet will be wrong.

    You could create an RCT balance sheet control account and transfer the RCT from the customer account to the RCT control account on the balance sheet by posting a credit note. You would need to ensure the credit note is posted under a non-VATable VAT code so it does not interfere with sales reports.

    Alternatively you could set up the RCT balance sheet control account as a dummy bank account and enter the RCT as a receipt to the RCT bank account from the relevant customer.

    Hope this helps.


  • #3
    dazzymc
    Users Awaiting Email Confirmation Posts: 104 ✭✭dazzymc


    Paddy001 wrote: »
    Treating it as a discount does not work as it will go to the profit and loss account as a loss when it is not actually a loss. The debtor balances may appear correct but the profit and loss and balance sheet will be wrong.

    You could create an RCT balance sheet control account and transfer the RCT from the customer account to the RCT control account on the balance sheet by posting a credit note. You would need to ensure the credit note is posted under a non-VATable VAT code so it does not interfere with sales reports.

    Alternatively you could set up the RCT balance sheet control account as a dummy bank account and enter the RCT as a receipt to the RCT bank account from the relevant customer.

    Hope this helps.

    Thanks Paddy001. Very helpful indeed. It's seems quite cumbersome to deal with something which, I guess, happens every day. You'd think sage would have a way to deal with this. Thanks for the reply.


  • #4
    paul71
    Registered Users, Registered Users 2 Posts: 3,284 ✭✭✭paul71


    Dummy bank account is best way to go. You can set on up both for RCT receivable and RCT payable if you want and if you get a refund from revenue for receivable you can post it as a bank transfer to your real bank account. If you allocated against other tax heads you can post as a bank payment to those tax heads.


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