How to process vat refund?

When I pay my vat bill - when I owe money, I go to spend money and select Vat tax Payable under liabilities and this pays my vat bill and my vat return reports show this.

This time round, the HMRC owe me money and they have sent a cheque which I have deposited. Do I just go to Receive Money, and select VAT Tax Payable to record the VAT refund?

In general, the answer is yes.

In saying that, I presume the VAT Tax Payable account showed a negative balance at the end of the accounting period. By using a Receive money transaction, with the amount recorded as a positive number, Manager will credit the VAT Tax Payable account, driving it in a positive direction (because being a liability account, it is a credit account), in other words, back toward zero. The transaction will debit the cash account where you post the receipt, driving it in a positive direction also (because being an asset account, it is a debit account).

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Yes the balance was negative. I just wanted to make sure that it was correct so I don’t end up with an incorrect amount for VAT return end of March. Thank you.