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V Andrews 205
Level 2

Do you need to create new income account for VAT refund

Hi, we've received a refund from HMRC for VAT paid on items before being VAT registered.  I have submitted and paid two returns before getting the refund.  How do this payment need to be recorded?  Do I need to create any new income accounts on the Chart of Accounts or is it recorded as sundry income?

Solved
Best answer March 02, 2021

Accepted Solutions
BettyJaneB
QuickBooks Team

Do you need to create new income account for VAT refund

I got you covered in recording the refund that you received from HMRC, @V Andrews 205.

 

You'll need to create a new income account to handle the refund that you received. As the refund relates to a period not filed within QuickBooks, you will have to make a deposit and allocate it to a separate income account.

 

To create an income account:

  1. Click Accounting, then go to Chart of Accounts.
  2. Press on New.
  3. Select the Account and Detail Types.
  4. Enter a desired name.
  5. Click Save and Close

The following is a brief video to serve as a visual reference:

 

 

Once done, you can now generate a deposit and use an income account the you made.

 

Here's how:

  1. Click the Plus sign (+) icon.
  2. Select Bank Deposit.
  3. Fill in the necessary fields under Add funds to this deposit.
  4. Click Save and close

Please see this sample snip for your guide: 

To give you more tips in managing refunds in QuickBooks Online, feel free to scan through this link: Record a VAT payment or refund.

 

Should you have any questions, please post a comment, and I'll be happy to help. Wishing you all the best. 

View solution in original post

2 REPLIES 2
BettyJaneB
QuickBooks Team

Do you need to create new income account for VAT refund

I got you covered in recording the refund that you received from HMRC, @V Andrews 205.

 

You'll need to create a new income account to handle the refund that you received. As the refund relates to a period not filed within QuickBooks, you will have to make a deposit and allocate it to a separate income account.

 

To create an income account:

  1. Click Accounting, then go to Chart of Accounts.
  2. Press on New.
  3. Select the Account and Detail Types.
  4. Enter a desired name.
  5. Click Save and Close

The following is a brief video to serve as a visual reference:

 

 

Once done, you can now generate a deposit and use an income account the you made.

 

Here's how:

  1. Click the Plus sign (+) icon.
  2. Select Bank Deposit.
  3. Fill in the necessary fields under Add funds to this deposit.
  4. Click Save and close

Please see this sample snip for your guide: 

To give you more tips in managing refunds in QuickBooks Online, feel free to scan through this link: Record a VAT payment or refund.

 

Should you have any questions, please post a comment, and I'll be happy to help. Wishing you all the best. 

View solution in original post

Gretta
Level 1

Do you need to create new income account for VAT refund

Being a little slow on this one.  I haven't had to deal with a VAT refund before in QB online.  So i know how to set up the new account but don't know what 'Account Type' or 'Detail type' to choose... Can anyone help me.  Also what do you do about the default VAT code?