This explains what to do when to delete a supplier refund.

If you use the VAT Cash Accounting scheme, you cannot delete a refund included on a VAT return. Instead create a reverse transaction. This clears the value from the bank account, supplier accounts and VAT return.

Always allocate a refund to a credit note or payment on account. When you delete the refund, the credit note or payment on account becomes outstanding. It's ready to allocate again.

Reconciled refunds

When you delete a refund included on a bank reconciliation

• The deleted refund shows on your bank reconciliation. It has a Removed from reconciliation label in the Corrected Transaction column
  
• The Starting Balance of your next bank reconciliation updates
• The Starting Balance is always the total value of all reconciled transactions, up to the statement date. Deleted transactions are not included in this balance

Delete a refund

1. From Banking, select the relevant bank account.
2. From the Activity tab, select the tick box to the left of the transactions you want to delete.
   A toolbar now appears above the list.
   
3. From the toolbar, select the Delete icon.

Once deleted

• The credit note or payment on account shows as outstanding. Refund it again where required
• If reconciled, the system removes the refund from the reconciliation. As a result, the Starting Balance on your next reconciliation increases.
• The deleted transaction shows on the audit trail with a line through

Reverse a refund

If you use the VAT Cash Accounting scheme, and the refund is on a VAT return, you cannot edit or delete it.

Instead, enter the reverse transaction. This clears the value from your supplier's account, bank account and to update the VAT return.

Reverse a refund allocated to a credit note

As you cannot delete or unallocate the refund, you must reverse the value of both the credit note and the refund. To do this create a new invoice and a new payment with the same date, bank account, amount and ledger account.

This removes the refund from your bank account balance. It updates the balance on your supplier's account and updates your VAT return.

1. Create a new invoice with the same date, ledger account and amount as the credit note. This reverses the credit note.
   • From Purchases, choose Purchase Invoices, then New Purchase Invoice
   • Enter the details identical to the original credit note, and Save
2. Pay the invoice. This reverses the refund.
   • Once the invoice saves, Choose Record Payment. Make sure you select the same bank account
3. Enter a new credit note and refund with the correct details.

Once saved

• The new payment shows on your bank account, cancelling out the value of the refund. Reconcile the new payment straight away. Make sure your balances are correct before your next bank reconciliation
• The invoice and the new payment show on the supplier account. This cancels out the value of the refund and credit note
• The new payment is on your next VAT return, cancelling out the previous refund
• Enter a new credit note and refund with the correct details

Reverse a refund allocated to a payment on account

As you cannot delete or unallocate the refund, you must reverse the value of the refund. To do this, create a new payment with the same date, bank account and amount. This updates the balance of the bank account, the balance of the supplier account and the VAT return.

1. From Banking, open the correct bank account.
2. Select New Entry, then Purchase / Payment.
3. Select the Supplier Payment tab. Enter the supplier, bank account, payment method, date, amount and VAT rate. This must be the same details as the original refund.
4. Choose Save and select Yes to save as a payment on account.

Once saved

• The new payment shows on the bank account, cancelling out the value of the refund. Reconcile the new payment straight away. Make sure your balances are correct before your next bank reconciliation
• The new payment is on your next VAT return, cancelling out the previous refund