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Record a VAT payment or refund in QuickBooks Online

by Intuit Updated 9 months ago

When you record a VAT payment in QuickBooks Online, you are recording the payment against a specific VAT period; you are not actually transferring money to HMRC.

Here's a short video on how to record your VAT payment in QuickBooks Online.


Why do I need to create a record of my VAT payment or refund?

Recording VAT payments or refunds is an important part of bookkeeping for your business. Every time money goes in or out of your bank account it needs to be matched to an invoice or bill so that your books balance.

When you make a VAT payment to HMRC or receive a refund from them, you need to create a record so that you can make a match with the associated bank transaction. If the money comes into or goes out of your bank account without this match being made in QuickBooks, your books won’t balance at year end.

How to record a VAT payment

  1. Go to Taxes and select VAT (Take me there).
  2. Select the ▼dropdown menu next to the return.
  3. Select Record Payment.
  4. Select the bank account you've used to pay HMRC.
  5. Enter the payment date and amount in the appropriate fields.
  6. Add a memo if needed.
  7. Select Save.
    Tip: You can view or delete the payment from the Payments tab.

How to record a VAT refund

  1. Go to Taxes and select VAT (Take me there).
  2. Select the All returns ▼ dropdown menu, then choose the specific VAT period you need.
  3. Select the View summary ▼ dropdown menu, then select Record Refund.
  4. Select the bank account the refund has gone into.
  5. Make sure you've selected Refund under Payment Type.
  6. Enter the refund date and amount in the appropriate fields.
  7. Add a memo if needed.
  8. Select Save.

This will create a new transaction in your books.

Adding transactions from your bank feed

If you are adding transactions from your bank feed, you'll need to record the VAT payment here first, then match it to the transactions on the Banking page.

Paying your VAT to HMRC

There are a number of ways to pay HMRC. However you pay, you'll need to record the transaction in QuickBooks using the steps above. Add the date the payment was made, or the date your Direct Debit is due to leave your bank account.

If you've connected your bank account, you'll be able to match the transaction in the bank feed to the VAT payment/VAT refund transaction you created in the VAT centre and balance your books.

We're here to help
If you have questions, or need help recording a VAT payment or refund, let us know. Sign in to QuickBooks and start a discussion with a qualified QuickBooks Online expert in the community.

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