If you use the VAT Cash Accounting scheme, you can't allocate invoices and credit notes that have different VAT rates.

If you try to, you receive this error:

Mismatch error

When you use the VAT Cash Accounting scheme, Sage calculates VAT on invoices. It puts the VAT into a VAT holding nominal ledger account until you record the payment. When you match the payment to the invoice, the system moves the VAT amount to the VAT on purchases ledger account. This shows on your VAT Return.

When you credit the invoice instead of receiving a payment, we deduct the value from this ledger account, as no VAT is due. If the credit note has a different VAT rate, there can be a remaining value in the holding account.

To resolve this:

Record your invoice as paid in full

1. Go to Sales, then click Sales invoices, or go to Purchases, then click Purchase Invoices.
2. Click the relevant invoice, then click Record Payment.
3. Enter the relevant information, then click Record.

Refund your credit note with the same date as your invoice payment

1. Go to Sales, then click Sales credit notes, or go to Purchases, then click Purchase credit notes.
2. Click the relevant credit note, then click Record Refund.
3. Enter the relevant information, then click Refund.

This ensures that the VAT elements of each transaction are correctly dealt with and appear as expected on your VAT Return.

• Delete a purchase invoice