When you set up in business via a limited company, your annual profits will be subject to corporation tax.
To record corporation tax payments in your Tally account you need to first create a transaction type (nominal code) named Corporation Tax.
- To do that, go to Settings > Advanced Settings > Enable Configure Nominal Codes > Click Update
- After that, go to Bank > Transaction Types > Add a new code named “Corporation Tax”. Click on the code to edit it, you should see a number of options for the code type. Set this to Current Asset/Liability and click Update
Recording a Corporation Tax Payment
To record a corporation tax payment go to Bank > View/Add Transactions > Add New Transaction.
- Date – this needs to be the date the money left the company bank account to pay the corporation tax.
- Comment - use this record a note about the transaction, i.e. 'Corporation Tax YE 2012'
- Type – select your new Corporation Tax code
- In/Out – as it's money that's left your account this should be out
- Amount – the amount that you have paid out
- VAT Rate – this should be N/A
- VAT Amount – this should be 0.00
When ready, click the Add Transaction button.