Tax amount does not appear on the Taxable Payments Annual Report

Legacy KB ID: 5030

Question

Why doesn’t the Tax Amount appear for some suppliers in the Taxable Payments Annual Report (TPAR)?  The amount of the transaction appears correctly. 

Answer

Use the correct entry forms for bill payments.

The Issue

You are likely to experience this issue if you enter a payment for a Bill through a means other than by Bill Payment. 

The Bill Payment transaction links to the original Bill and has access to its details – like the Tax Code that drives the tax amount appearing in the Tax Amount column of the TPAR.

If you pay the Bill through a Write Cheque or a General Journal entry, then apply the credit these transactions create to the Bill, then the tax amount will not appear on the TPAR as these documents do not have access to the details on the Bill.  As no tax codes appear on these documents, no amount is posted to the Tax Amount column of TPAR.

Workaround

You will need to delete the non Bill Payment transactions and re-input them as Bill Payments. 

Paying multiple Bills to one Supplier with one payment

If you receive more than one bill from a supplier in any given period and pay all the bills with one payment, you may be paying the Supplier one total amount generated by a Write Cheque transaction.  You then close the Bills by applying part of the credit the Write Cheque transaction creates.   This method results in no tax amounts in the TPAR.

The preferred method to ensure tax amounts appear on the TPAR is:

1.    Create a dummy bank clearing account (eg TPAR Clearing);

2.    Pay the Bills to one supplier from the dummy bank clearing account;

3.    Process a Write Cheque to pay the supplier and transfer funds from your normal bank account to clear the dummy bank clearing account:

                                          i.    Bank Account:  the relevant Bank Account

                                         ii.    Pay to the Order of:  your Supplier;

                                        iii.    Expense Account:  dummy bank clearing account;

                                       iv.    Memo Column:  what you would like to appear on Supplier’s bank statement – eg: Invoices dated last month;

                                        v.    Payment Method: 

1.    Writing a cheque – Cash/Cheque or Cheque to Print

2.    Online banking - Bank (Online)

Your dummy bank clearing account is now cleared (balance = 0.00) and your bills paid through normal Accounts Business processes so that tax amounts will now appear on the Taxable Payments Annual Report.