I have had to credit a foreign B2B customer for the VAT I charged on services which have since deemed to be a non-VAT service. How do I record the refund?

 I appreciate what you've done so far, Andrew. Allow me to assist you further so you can successfully apply credit to your customer.

After creating a credit note, you can record an expense to account for the reimbursement. To do that, follow these steps:

1. Click on +New and then select Expense. In the Payee field, choose or enter the customer's name.

2. In the Payment Account field, select the bank account from which the money is being refunded.

3. In the Category field, select the Debtors account (Accounts receivable).

4. Enter the amount of the refund in the Amount field.

5. In the VAT field, select No VAT (not inclusive/exclusive of tax).

7. Click Save. Next, click on +New and select Receive payment.

8. Add the customer and select the payment method and deposit to.

9. The balance should be 0 as they will cancel each other out then click Save and Close.

Additionally, you can learn how to track your cash flow in QuickBooks Online: Use reports to track cash flow in QuickBooks Online.

Keep me posted if you have more concerns about credit to your customer in QBO. I'll be around to help you again. Have a good one.