Handling No ABN Withholding tax Reckon Accounts Business and QuickBooks.

Legacy KB ID: 4901

Question

I have received a bill from a supplier that has not quoted an ABN number.  How do I withhold the ‘No ABN’ withholding tax and make sure it appears on the BAS in the W4 field and is included in the Taxable Payments Annual Report for the Building and Construction Industry? 

 

Answer

You will need to create a Credit Note for the No ABN withholding amount and then apply this Credit Note to the bill when you pay it. 

You will need the following accounts and items:

·         Current Liability Account titled No ABN Withheld to accept the amounts withheld:

o    Lists menu > Chart of Accounts > Account > New

o    Account Type:  Other Current Liability, named No ABN Withheld

·         Service Item titled No ABN Withheld to use on the Credit Note:

o    Lists > Item List > Item > New

o    Type:  Service, named No ABN Withheld;

o    Rate: leave blank

o    Tax Code: None

o    Account: your current liability account: No ABN Withheld

 

Entering the Credit Note:

In the Net Amount column, enter the amount of the bill and then click on * on your keyboard.  A calculator will open.  Type in the rate of the withholding tax as a decimal.  That is, 46.5% will be entered 0.465.  Click Enter to see the amount of the withholding tax.  Click Ave & Close to complete the transaction. 

 

When paying the bill, apply the credit note first and then pay the remainder of the bill. 

 

To report No ABN Withheld on the BAS return:

1.    In the Simplified BAS > Taxes and Amounts Withheld, click on the W4 button;

2.    Select your No ABN Withheld account and click OK;

3.    Also select any other accounts you may have for collecting withhelds for No ABN being quoted on bills. 

4.    W4 amounts will be included with ‘Pay As You Go withholding’ (Item 4) on the Debits and Credits tab.

5.    On your cheque to the ATO, you must enter the No ABN Withheld amount as a separate line debiting your No ABN Withheld current liability account, to reduce that account’s balance for the amounts being forwarded to the ATO. 

Please Note: you will also need to give the supplier a PAYG payment summary – withholding where ABN not quoted.  Please see the ATO website https://www.ato.gov.au/businesses/content.aspx?doc=/content/18736.htm for more information.

 

To include No ABN withheld on the Taxable Payments Annual Report:

See kb 4858 https://kb.reckon.com.au/issue_view.asp?ID=4858 for details on configuring and using the Taxable Payments Annual Report in Accounts Business 2013.  No additional action needs to be taken

 

 

Additional Information

You can enter the Service Item for No ABN withheld on the bill directly as a negative amount.  However, the use of negative amounts on forms like a bill may cause some reports not to display the correct amounts.  Reckon strongly recommends the use of a Credit Note.

1.    Enter the bill.  If there are many items, add a Subtotal;

2.    On the next line, enter the No ABN withheld service item;

3.    In Net Amount column, enter a negative sign and the amount of the bill;

4.    Click on the * sign on your keyboard and enter the rate of the withholding as a decimal.  That is, 46.5% is entered 0.465.  click Enter.  The amount will be the amount of the No ABN withholding tax.

5.    Save & close to complete the transaction. 

Need more help?

Ask the Reckon Community at: https://community.reckon.com/

 

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