Hello Sara Hodgson, good afternoon, and welcome to the Community page, you cant link a credit note to a bank payment directly, you would need to do an expense and link that to the credit note to then match up in the banking section. Here is some more information and the steps you need to do to achieve this. If the refund is showing as payment on you're banking page, you can categorised it as an expense posted to debtor's account> selecting NO VAT> select the name of the customer. This will reflect to the customer account, you can apply this to an open invoice or offset this to an unapplied credit note by going to the New transaction dropdown on the customer account>select payment and tick both expense and credit note> Save and Close.
