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Post Info TOPIC: Quickbooks - how to enter a compensation payment which has no tax liability
mork


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Quickbooks - how to enter a compensation payment which has no tax liability
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Hello & hope someone can help ...

I'm a small business using quickbooks pro v6 & have received a payment of a few grand as a 'statutory compensation payment' (which is a payment based upon the rateable value of a business premises & is legally due to a business tenant that is displaced by the landlord in certain circumstances) due to my business premises being re-developed & having to move on in the near future.

I'm told by the developers solicitors that this payment isn't classed as an income (i didn't have to invoice for it & it doesn't include any vat) and doesn't incur a tax liability. Does anyone have any ideas how to enter this?



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semsley


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I suppose it's a bit like a rent rebate so I'd make a new item as a sub-account of rent and use the Exempt code for VAT.

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Wella


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Hi Sheila

The only problem with that is it would reduce the rent expenses, and skew the profit.

Just done a quick bit of searching and found out it should it be treated as a Capital receipt, so maybe a sub account of Capital Introduced (or QBs equivilent)

HTH

Bill

Edit: Sorry didn't quote the source. It was an AW Blog

http://www.accountingweb.co.uk/blogs/bournebc/bourne-agenda/displaced-business-tenants-statutory-compensation-make-sure-you-don-t-m

 



-- Edited by Wella on Wednesday 4th of May 2011 08:59:17 AM

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mork


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Many thanks for your help!



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