Record VAT payments and refunds
Description
Cause
Resolution

How it works

When you enter a transaction with VAT, we update the VAT on Sales or VAT on Purchases ledger accounts, depending on whether it is a sale or a purchase. This tells you the total amount of VAT from your sales and purchases.

When you submit a VAT return, we transfer the amounts from the VAT on Sales and VAT on Purchases ledger accounts to the VAT Liability ledger account, to tell you how much you owe to HMRC. The balance of the VAT on Sales and VAT on Purchases is now zero.

When you pay your VAT return, we update the VAT liability ledger account with the amount of the payment. When you have fully paid your VAT, the balance of the VAT liability is zero.

Learn more about clearing the VAT liability account.

You can record your VAT payment or refund in a few different ways:

  • Use the Pay or Reclaim button from the VAT Return
  • Match the payment or refund from a bank feed
  • Record a VAT payment without a corresponding VAT return

Reclaim your VAT from the VAT return >

If you are due a VAT refund, the button will show Reclaim by default. Enter the amount that you have received from HMRC.

  1. From More, select VAT Returns.
  2. Choose the VAT Return you want to reclaim.
  3. Select Reclaim, then enter the amount, date and the bank account the money was paid into.
  4. Select Save.

Once saved, the VAT Return shows as Paid. If you didn’t reclaim the full amount, it shows as Part-paid. We also update the VAT liability ledger account. If you pay or reclaim the amount in full, the balance will be zero.


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