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Nov 16, 2021 6:36 PM UTC
Question

How do I account for the invoices of a company who secured a tax refund for us, paying us the balance having deducted their fees. ?

We have not 'paid' their invoices: they have been retained from the tax refund paid by HMRC to the specialist company. How can I enter and 'pay' the invoices so we can reclaim the VAT?

1 reply

Nov 30, 2021 4:58 PM UTC

You need to enter a receipt and a payment equal to their fee e.g. your tax refund should have been £1,000 but you only received £500 because their fee was £500. The bank receipt of £500 would be allocated to the tax refund you then create a payment of £500 to the supplier and enter another receipt of £500 to your tax refund. This supplier payment and second receipt contra each other on your bank account.