Short answer
In the Balansix Cash VAT workflow, invoice VAT is released when the related receipt or payment is allocated. An unallocated bank movement should not release the invoice VAT.
What to check
- Confirm the client is using Cash VAT.
- Open the receipt or payment and check its allocation.
- Match it to the correct invoice or opening subledger item.
- Confirm the allocated amount where the settlement is partial.
- Review the VAT return source lines again.
What should happen
VAT should be released in line with the amount actually allocated and should appear in the appropriate open VAT return.
If the VAT still does not move
Check that the invoice itself carries the expected VAT treatment and that the payment or receipt is not merely coded on account. If the allocation is correct but the VAT result remains wrong, contact support with the transaction and VAT period.
How Cash VAT timing works
Under HMRC's VAT Cash Accounting Scheme, output VAT is due when the customer pays and input VAT is recoverable when the business pays the supplier, not when the invoice is issued or received.
Balansix follows that rule by releasing invoice VAT only when a receipt or payment is allocated to the invoice. A bank line coded 'on account' or left unallocated has not settled a specific invoice, so it cannot release that invoice's VAT. Part payments release VAT in proportion to the amount allocated.
Frequently asked questions
Does a part payment release part of the VAT?
Yes. VAT is released in line with the amount actually allocated to the invoice, so a partial settlement releases the matching share of the VAT.
Why did the VAT appear in a later return than expected?
Under cash accounting the VAT follows the payment date. If the invoice was paid in a later period, the VAT belongs in that later return.
What about invoices that were open when the client joined Balansix?
Bring them in as opening customer or supplier items and allocate later receipts and payments to them. That allocation is what releases their VAT.