Hello, a client paid their VAT return total when it was a refund, how do I show the overpayment against a future return? Thanks

I appreciate you reaching out, @usersuzanneflux.
 

To make sure I provide the right fix, could you confirm a few things? Did the client physically pay HMRC? Also, has the return already been filed via MTD?
 

If they actually sent money to HMRC, first, check that the filed return shows as a refund (debit) in your VAT liability account in your Chart of accounts. Then, record the cash they sent as an Expense (categorized to that same VAT liability account). This creates a credit balance that will automatically offset what they owe on the next return.
 

For more detailed guidance, refer to this article: File your VAT return and record VAT payments in QuickBooks.
 

If it’s not filed via MTD yet, you can use a VAT adjustment in QBO so the refund amount is correct before you hit submit.
 

To learn more about VAT Adjustments, check these resources:
 

• Make VAT adjustments in QuickBooks
• HMRC Guide: Correcting VAT errors
   

Since VAT can be tricky, I recommend consulting with a certified accountant to ensure these adjustments align with your digital audit trail and compliance requirements.

Let us know if you have further questions or concerns.