Withholding Tax

 

People who pay Withholding Tax can be set up as follows:-

  • Set their Tax Code to "WT".
  • Press the "More >" button.
  • Enter their Withholding Tax Rate into the Special Tax %field.

Withholding Tax deductions are reported separately on the Tax Remittances and Returns to Inland Revenue. We will automatically calculate and report the correct figures.

Please refer to Inland Revenue for specific activities and Withholding Tax Rates.

Withholding Tax Deductions for people with PAYE

You can make ad-hoc payments with Withholding Tax deducted to people with standard PAYE tax codes.

(This is an unusual situation, but sometimes directors fees are paid to employees with withholding tax deducted, instead of treating them as standard taxable payments).

To deduct Withholding Tax when people are on PAYE:-

  1. Set up a special payment code as an allowance Extra Emolument / WT (No ACC Earner Premium).
  2. Enter the timesheet, including the extra payment that has withholding tax deducted.
  3. Enter a WT transaction, putting the WT percentage into the Quantity field.

This will correctly separate the person's PAYE and WT on the relevant Inland Revenue reports.