How do I record a VAT payment made from a *personal* account?

Welcome to the Community, vegahaloorcus. We want to ensure we can provide a timely solution to your concern regarding VAT payment. I can share my knowledge to help you with your concern.

When adding VAT payment for the business expenses covered by personal funds and not reimbursing the expense paid into a personal account, follow these steps to enter the expense:

1. Select + New, and choose Journal Entry. Then select the expense account.
2. Enter the purchase amount in the Debits column.
3. On the second line,
4. choose Partner's equity or Owner's equity.
5. Enter the same purchase amount in the Credits column
6. Select Save and Close.

Once done, add your personal account, then use it when recording the VAT payment.

For more details about handing business expenses you made with personal funds, check this article: Pay for business expenses with personal funds.

In addition, you can refer to these helpful resources if you're ready to make liability payments:

• Submit an MTD for VAT return to HMRC in QuickBooks Online
• File your VAT return and record tax payments in QuickBooks Online

Please let me know if you have any more questions regarding recording a VAT payment from a personal account. I am here to help you with your questions.

Thank you for your response, unfortunately, this doesn't answer my question.

I am asking about recording a VAT repayment to HMRC (Taxes>VAT>Record Payment) from my personal bank account rather than my business bank account.

My personal account obviously isn't connected to QBO but the only options for recording a VAT repayment are from bank accounts.

Hi vegahaloorcus Thanks for reaching out to us on the Community. As you have discovered you can only select bank accounts from the VAT payment section, you can also select credit card account. You could create your personal account as a new bank/chart of account and then create the payment. Are you intending paying the personal account back from the business account?

So I will have to create a new bank account that holds a single transaction? Is that correct?

Thanks for getting back on this thread, Vegahaloorcus. I can share some insights about VAT record-keeping in QuickBooks Online (QBO).

Yes, you'll need to create a personal account as a new bank account in your Chart of accounts (COA) in QBO and then create the payment. These steps will let you record a VAT repayment from a personal bank rather than your business bank account. I'll guide you through the process.

First, add a new account to your COA.

1. Go to Settings and select Chart of accounts.
2. Click New and enter an Account name. 
3. Choose an Account type, then select the Detail type.
4. If this account is a subaccount, check Make this a subaccount, and select the Parent account it should be under.
5. If you select Cash at bank and in hand, Assets, Credit card, Liabilities, or Equity for the account type field, enter the Opening Balance, and fill out the starting date in the As of field.
6. Add a Description to add extra information about this account. 
7. Select Save. 

Next, record a VAT payment:

1. Go to Taxes and select VAT.
2. Click the dropdown menu next to the return.
3. Press Record Payment.
4. Choose the bank account you've used to pay HMRC.
5. Enter the payment date and amount in the appropriate fields.
6. Add a memo if needed.
7. Select Save.

Moreover, you can read this resource to learn more about managing funds and VAT payments in QBO.

• Mixing business and personal funds in QBO
• Manage VAT payments

Finally, you may want to generate a report showing each VAT agency, the taxable amount of sales, and payments. Here's how:

1. Go to Reports.
2. Search and select VAT Liability Report in the search field.
3. Hit Run report.

Feel free to ask if you have any further questions about recording a VAT payment from a personal account. I'm available to assist you with any inquiries you may have.