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Post Info TOPIC: posting ni payments in accounts
lor


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posting ni payments in accounts
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Hi All,

Could you tell me what the correct method of posting payment of ni class 2 (the weekly one) for a self employed person is in the accounts.

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Wella


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Hi Lor

NI contributions are a personal payment to HMRC, therefore I would post them to Drawings.

Bill

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lor


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thank you Bill.

So therefore am I right in thinking that it would be dr NI account and Cr Drawings account?

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Wella


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Lor

I think that would depend on how you have the accounts set up.

I tend to treat it like any other item paid for, for personal use, and CR Bank (if paid by chq) and Dr Drawings, as like a tax bill the NI contribution is the reponsibility of the individual and not a business expense (albiet, the result of running his/ her business).

Th only way NI is a business expense, is when it is paid as part of an employees gross wages and the additional employers contribution

Bill


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Davey


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I agree with Bill Your own Class 2 Contributions are not not allowable as an expense in your
accounts so yes post them to Drawings.

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David
lor


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okay I see, thank you for your advise.

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lor


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so if a client paid for their ni contributions from their personal ac there would be no need to account for this at all, is this correct?

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Wella


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Yes

That's would eliminate the need to account for it in the books.

Bill

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lor


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thank you Bill.

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