This section explains how to account for quarterly instalments that were not accrued in your previous SMSF software when processing a first-year fund on Class. The process highlighted below will allow you to successfully account for PAYG instalments relating to the previous income year that were not accrued on the balance sheet but were taken up in the annual return.
Jack Accountants were using generic admin software before moving to Class to administer their SMSF.
One of the funds transitioned onto Class at 30/06/2018 had a June 2018 PAYG income instalment of $1,000 that was not accrued as per the accounts but was taken up in annual return tax calculation. The June PAYG instalment is paid after year end.
As per the financials’ the tax provision at 30/06/2018 was $2,000 Cr.
On the 2018 lodged annual return, the amount payable was $1,259 (considering the $259 supervisory levy). Below are the steps to process this.
Navigate to Fund Level > Transactions > Match Transactions
- Click on the menu icon and select Match to New > Fund Expense > Fund income tax payment
- The below-indicated fields will need to be changed. As per this scenario, the Tax Paid field will be changed to $1,000 (PAYG Amount) and the SMSF Supervisory Levy field will be cleared to nil
- After making changes to the amounts for Tax Paid and SMSF Supervisory Levy click Submit to process this transaction. This business event will be processed against the Income Tax Payable/ Refundable account in Class and not the Income Tax Instalments Paid account.
For processing PAYG income instalment that relates to the current financial year being processed, the Fund Activity Statement event should be used. Refer to the article on Processing a BAS/IAS payment