a supplier has paid a credit direct to our bank account, how do i account for vat as when I use banking make deposit there is no facility for VAT
It is unusual for a supplier to refund direct. When I had this problem I used the Company Credit Card a/c as a vehicle for operation. Under Banking I selected the "enter credit card charges" and made it a refund. I entered the details using the expense account originally used for the purchase. This allowed use of the VAT facility. I then passed a journal entry to move the deposit from the credit card a/c to my current A/c. You have a full audit trail and your accounts will be correct including VAT.
You should raise a debit note against that supplier. This is effectively an invoice raised against suppliers (not customers) commonly (but incorrectly) also known as a supplier credit note.
You can/should raise debit notes against a supplier and post this to correctly account for the VAT (it reduces your INPUT VAT and PURCHASES whereas an invoice would increase your OUTPUT VAT and SALES)
Most accounting systems do not differentiate between Supplier Credit notes and Debit notes, and as QBO is not any different, just enter it as a Credit note, accounting for the VAT as required. This gives you the added advantage of matching the debit note to any actual credit note received.
bit long winded, but I hope it explains as well as answers.
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