Interest on a Quaterly Vat repayment

Hi @R Pocock  

HMRC appears to have new guidance which means they will pay interest on VAT Refunds even when they're not really late.  Sounds great but, unfortunately, the extra work involved in allocating in QBO is probably more than the interest payment!

I've been thinking about the best way to do this but haven't quite made up my mind yet.

You can't add it to the VAT Refund in QBO because it will upset the VAT Suspense account.

I think the only way to do it is to enter as a separate payment in QBO - use Bank Deposit from HMRC allocated to Interest Received for the £0.43 with NoVAT code.

Enter the VAT Refund as usual (at the calculated amount).

Match the VAT Refund & the Bank Deposit to the single payment received.

Hope this helps.

Hi R Pocock, thanks for joining the Community. We'd recommend reaching out to your bookkeeper or accountant for assistance in recording this, as it may require creating a new account in your chart of account to post the interest repayment to. If you don't already have an accountant, you can find a QuickBooks Certified ProAdvisor near you on our online directory. 

Hi,

I have just come across this issue myself,

I am pretty novice when it comes to Quickbooks - so if possible could you break down the steps?

I currently have a single bank transaction (linked bank account) for the refund including interest.

In the VAT panel, I recorded a refund for the calculated amount (Not including interest) - as normally would,

So as it stands, I have no option to "match" the record that came from the bank,

Thanks,

Jack

 Hello JBlm,We would recommend reaching out to your bookkeeper or accountant for assistance in recording this, so it shows correctly in your account as we are not trained accountants just technical support.  You can find a QuickBooks Certified ProAdvisor near you on our online directory if you don’t have one already. 

If you have already posted the repayment in the Taxes section, delete this.

Post the refund (matching the actual return) again using the date the refund came into the bank account but put it to Undeposited Funds.    

Go to Make Deposit and tick the refund, scroll to bottom of screen and add the interest (post to interest received or similar account).  Check total agrees with total received into your bank account, check that the deposit will go the the bank account that the refund was received into. 

Save

Return to bank transactions and the item will now have found a match.