How to input withholding tax
What Is & Mastering Professional Services Withholding Tax Ireland
So, you’ve just completed a nice social media training job for a university on ‘Facebook and what it means to cats’. You check the bank and see they’ve paid you, but there is only €800 euro there and not the €1,000 you agreed. Before you pick up the bat phone calling injustice, STOP. COLLABORATE & LISTEN – you’ve just said hello to Professional Services Withholding Tax Ireland.
What You’ll Master
– Quick overview of what Professional Services Withholding Tax is
– How you handle it with in your online accounting solution
– Have it organised correctly for your accountant
Professional Services Withholding Tax Ireland is the government’s way of guaranteeing they get paid tax. So what the university have done is held onto some extra money (20%) and given it straight to the government. At the end of the year when you’re doing your tax returns, if you owe any tax you use that €200 to reduce the tax you owe. You can also apply to claim back the 200 euro early (under certain circumstances)
So What Happens
– You create an invoice and send it to a public body (eg. University, Local Council).
– That public body pay you 80% and send 20% to the revenue commissioners.
– You do your year end and your accountant will claim that 20% back
How Do I Manage That In Bullet Accounting Software
So, the problem arises in that you have created an invoice as €1,000 but only €800 gets put in your back account. That means you invoice hasn’t been fully paid, but you’re not going to get any more money so don’t want to constantly see the invoice as unpaid. There is a really easy fix in Bullet Online Accounts for this – we’ll explain the actions below with reasons beside them and we have also created a little video. Remember, as always Bullet won’t let you do anything with your online accounts that’s wrong, you can always delete, edit and recreate at any stage.
This Is What You Do
– Create a new bank account – a place to put put the €200
– Mark €800 of the €1000 invoice as paid – Fixes the match/reconciliation issue
– Mark the remaining €200 of the invoice paid to your other bank account – Keeps it for the year-end returns
Clear as mud? Here is a quick 2 minute video that shows you everything. (it’s recorded in our old look and feel but the process is the same)