You cannot delete a customer refund as it’s always linked to a customer receipt.
Cash Basis scheme
You cannot delete a refund that’s included on a VAT Return. Instead create a reverse transaction to clear the value from the bank account, customer accounts and VAT Return.
A refund always matches the receipt that is being When you delete the refund, the credit note or payment on account becomes outstanding ready to allocate again.
When you delete a refund included on a bank reconciliation

From the Activity tab, select the tick box to the left the transactions you want to delete.
A toolbar now appears above the list.

You can refund a credit note or payment on account as needed when it appears as outstanding. However, once you reconcile it, the refund will adjust the reconciliation, reducing the starting balance on the next reconciliation. The deleted transaction will appear on the audit trail with a line through it.
You cannot edit or delete a refund included on a VAT Return in the Cash Basis scheme.
Instead enter the reverse transaction to clear the value from your customer supplier account, bank account and to update the VAT Return.
As you cannot delete or unallocate the refund, you must reverse the value of both the credit note and refunded 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 you bank account balance, updates the balance on your customer supplier account and updates your VAT Return.
Create a new invoice with the same date, ledger account and amount as the credit note. This reverses the credit note
From Sales, choose Sales Invoices, then New Sales Invoice.
Enter the details identical to the original credit note, and Save.
Pay the invoice. This reverses the refund
Once Saved, Select the invoice, then choose Record Payment. Make sure you select the same bank account.
Enter a new credit note and refund with the correct details
Once saved
As you cannot delete or unallocate the refund, you must reverse the value of the refund. To do this, create a new payment receipt with the same date, bank account and amount. This updates the balance of the bank account, the balance of the customer supplier account and the VAT Return.
Choose Save and select Yes to save as a payment on account.
Once saved, the new payment receipt offsets the value of the refund in your bank account and will reflect in your next VAT Return, effectively nullifying the previous refund. We recommend reconciling this receipt to maintain accurate balances before your next bank reconciliation.