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HMRC credit that has been offset

How to account in Xero for a refund that HMRC have offset on their side

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We have received a credit for 400 GBP from HMRC for fines in the past that they have reversed. They have used the 400 against the next months bill. I had created an 'asset' in our balance sheet for the 400 and was then looking to apply this to the next bill. The bill is generating an accounts payable entry as you would expect but I can't find a way to use the asset we now hold against the bill to clear the accounts payable. We use zero.

The credit I set up is here:


And the journal the bill creaded is here:


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Danny Kent
By Viciuno
16th Jun 2022 15:02

I can't read the screenshots you have attached to your question; they are too small to read and AW won't let me click on them so I'm not too sure what exactly has happened.

From your description sounds like you created a nominal code, and somehow allocated £400 to this? With a spend money or something? Doesn't really matter I suppose. Sounds like you have your £400 Dr there anyway.

If that is the case, then you need to go back to the chart of accounts, find your new nominal, select it and then tick the box that says "allow payments to this account" or something like that. You can then jump into your bill, then mark £400 as paid via the new nominal.

Thanks (1)
By jonslinn
16th Jun 2022 16:33

Can't thank you enough! That's done the trick. The journal it created was:

Accounts Payable (800) DR 400.00
HMRC Credits (792) CR 400.00

Which is exactly what I could not do through the manual journal. Thanks again.

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