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Recording a VAT payment or refund in QuickBooks

by Intuit•103• Updated 2 weeks ago

Learn how to record a VAT payment or VAT refund in QuickBooks Online.

This article is for customers who use QuickBooks Online.

Recording a 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.

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

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File your return and mark it filed here to keep your books in order. 

  1. Go to Taxes and select VAT (Take me there).
  2. From the Returns tab, find the return you've filed.
  3. Select Record payment from the ▼dropdown menu next to the return.
  4. Select the bank account you've used to pay HMRC.
  5. Enter the Payment date and Payment amount in the appropriate fields.
  6. Add a Memo if needed.
  7. Select Save.
  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. Use the View return ▼ dropdown, 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 creates a transaction in your books that you can match with your bank feed.



Matching bank feed transactions

If your bank account is connected in QuickBooks, you’ll still need to record the VAT payment or refund manually using the steps above. Then, go to the Banking page to match the transaction and keep your books reconciled.



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.

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