Shouldnt have to though its actively marketed by QB as a feature! Why market a feature that doesnt work? Essentially it is being missold but this is the tip of the iceberg. If it wasnt such a hassle I would be looking at other software as there are so many issues that they know about and are "working on" its crazy. Google any issue you have and its almost guaranteed they will "pass it on to the development team".

For this issue...

You have to find the payment in the PayPal bank feed

Click on it then click "find match"

Select the invoice (which will actually show as Type: Payment, not an invoice so again wrong)

Then click the Resolve button

Enter...

Payee: PayPal

Category: PayPal Fees

Amount: The fee total (shown near the Resolve button) as a costs so -3.20 NOT 3.20

VAT: Exempt (Purchases)

Click 'Save'

At least thats how I am doing it and if my books are wrong I know where Im advising the Tax man goes as this is a MTD authorised piece of kit but its not doing what they say it does so I do it the best way I have worked out.