How invoices affect VAT

Hello Lisa180, What transaction did you do to write off the bad debt in QuickBooks? This will help us see why the VAT has not been affected. There are options we can go through to adjust the return once we know that. Thanks.

Hi EmmaM. For the majority I raised a credit note to clear the balance but there is one which I raised a refund receipt for. Thanks.

Hello Lisa180, thanks for coming back to us here, so when you raised a credit note and refund receipt was VAT applied to any off them? 

Hi Ashleigh1, yes VAT was on all of them.

Thanks for keeping us updated, lisa180.

Upon creating a Refund Receipt with a VAT code or Credit Memo, they should appear as a negative amount on your VAT return. You can review the VAT 100 return dated on those transactions and check Box 2 for the Sales for the negative figures.

To run the report, here's how:

1. In the left menu, click Reports.
2. Scroll down to see the Manage VAT section. 
3. Click VAT 100 Report.
4. Set the necessary filters.
5. Click Run report.

From there, check Box 2 for the negative figures.

To know more about how VAT works in QuickBooks Online, see the below articles:

• VAT: Getting Started
• File your VAT return and record tax payments in QuickBooks Online
• VAT 100 Report
• Common VAT Codes

Let me know if there's anything else that you need. I'll be right here to assist you. Stay safe!

Hi MirriamM, that figure is always zero no matter what date period I run.

Thank you for following the steps shared by my peer above and sharing the result with us, @lisa180.

Allow me to step in and provide additional information on how VAT affects sales transactions.

One of the possible reasons why VAT applied to a credit note and refund receipt hasn't been affected is because of the VAT accounting scheme. If your VAT accounting scheme is set up as Cash, you'll need to apply the credit note to the invoice. However, if it's set as Standard, you'll want to post the VAT to the credit note's date. Then, adjust the date of the VAT 100 report as it should show a negative value on the VAT on sales.

If you still got the same issue, I recommend reaching out to our QuickBooks Support Team. This way, they can further look into this matter and provide some troubleshooting steps to get this resolved. To reach them, please follow the steps below:

1. Sign in to your QuickBooks Online account.
2. Click the Help button.
3. In the QuickBooks Assistance chatbox, select Talk to a human and choose I still need a human.
4. Hit Contact Us.

You can also check out this article for another way of reaching out to our support team and its support hours: QuickBooks Online Support.

Once you're ready to submit your VAT return, you can read through this article for more guidance: Submit a VAT return in QuickBooks Online.

I'm still open to your replies if you have additional questions about VAT. Have a great day ahead!

Thanks Mark_R. The VAT section is set to cash. I'll contact the support team!

Further to this, I contacted the support team as suggested. I was on the phone for 1 hr 42 mins and for a lot of that time I was put on hold whilst the QB employee tried to work this out. The problem hasn't been resolved. Can anyone help??