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cartlandward
May 16, 2025
Question

How do I record a VAT refund of £87.82, against a VAT return of £87.80, as HMRC have added 2p interest to the refund

  • May 16, 2025
  • 1 reply
  • 0 views

My VAT return when processed in the VAT section of Taxes ws for £87.20. I have used the record refund to add the payment, but the payment from HMRC was for £87.02, so the taxes VAT section is noting 2p owed to the tax man now - how do I record the interest part of the refund

1 reply

EduardA
EduardA
May 16, 2025

You can enter the interest of your VAT refund by using the Bank Deposit feature, @cartlandward.

 

The interest portion of the VAT refund cannot be recorded in the usual manner along with the standard VAT refund, as this would create discrepancy with the VAT Suspense account. Instead, it should be entered separately in QuickBooks by making bank deposits and consult an accountant as to which account this interest should be applied to.

 

Here’s how to record bank deposits in QuickBooks Online (QBO):

 

  1. Go to the + New button, then select Bank deposit.
  2. From the Account dropdown, select the account you want to put the money into.
  3. Under the Add funds to this deposit section, provide the necessary details. Ensure the amount is correct, which is the VAT refund interest received from HMRC.
  4. For the Amounts are dropdown, choose No VAT.
  5. Select Save and new or Save and close.
     

 

For more information, refer to this article: Record and make bank deposits in QuickBooks Online.

 

Furthermore, I'd like to share this article to help you ensure the integrity of your financial statements: Reconcile an account in QBO.

 

If you have additional questions about managing your VAT payments or refunds in QuickBooks, please feel free to leave a comment. The Community is here to assist you.

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