Let me help you with paying your invoice and VAT in QuickBooks Online.
If the invoice shows that the product you bought is taxable, then select Exclusive of Tax. Thus, you should only pay $1000.
Otherwise, select Inclusive of Tax if the supplier sent you an Ex-VAT invoice. This way, the tax amount will be added to your invoice. Thus, you'll pay $1200.
Please see the attached screenshot for your guidance.
I've added these articles for additional information: