Withholding Tax

Method 1. Recording WT using a Bank Account on BRC.

If its regarding Sales, the first thing we need to do would be to create a "Bank Account" in Big Red Cloud to hold these funds.

Then, when a Customer pays you and there is WT (Withholding Tax) on it, you would:

1. Enter a Receipt for the total amount minus the WT amount, Save & Lodge this into your main Bank Account.
2. Enter a Receipt for the WT amount, Save & Lodge this to your WT Bank Account.

When Revenue gives you the Withholding amount, you should then:

1. Go to the payments book, select the withholding account and make a transfer into your main account (for the amount Revenue has given you).

If its regarding Purchases, the steps are quite similar

1. Pay the Supplier the full amount minus the WT amount from your main Bank Account.
2. Use the WT "Bank Account" to pay the outstanding amount to the Supplier.
3. Then just do a transfer from the main bank account to the withholding bank account to show you have made your payment to Revenue for it.

This last step can be held off until you actually have to pay that amount to Revenue etc. or can be done right away.

Method 2. Recording WT using Analysis Categories/Nominal Accounts on BRC.

You can also use Analysis Categories to record Withholding Tax instead of the above Bank Account method.

To do it this way, you would first: 

• Enter the full amount as a Receipt into the Cash Book (including the Withholding tax), 

Then make two payments from the Cash Book. 

1. One into the bank for the actual amount that went into the bank.
2. One for the withholding tax amount against the relevant Analysis Category.