Tax Deducted at Source

This question came in from a consulting dentist who gets paid for work via a health authority but needs to account for it himself.

As an example, he gets paid £1000. However, HMRC deduct, say, £200 at source to cover tax, etc. This is how to account for it:

1. Open a new current asset account (type General Account), and call it Tax Control.
2. Open a new profit and loss account (type Tax Account), and call it Tax Paid.
3. Record the sale (Blue books) From Consultancy To Tax Control (£1000)
4. Add a Transfer Transaction (Green books) From Tax Control To Tax Paid (£200)
5. Add another Transfer From Tax Control To Bank (£800)

The end balances are 800 in the bank, 0 in Tax Control, sales of 1000, 200 tax paid. And all this shows 800 net profit.