Could anyone advise/help with this query? I have run the VAT return and reconciled but there is a CR balance left on the Purchase Tax Control Account, would anyone be able to advise how I can clear this or how I double check for anything not pulling through to the VAT Return? There should be a zero balance on this nominal code after vat return reconciled (NC 2201)

Many thanks for you help


  • +1
    verified answer

    NOTE - nothing more has been posted after VAT reconciliation, therefore it is not "future"

  • +1
    verified answer

    You could try a number of ways, but I'd start with the Transactions screen.  Run a Filter where nominal code is equal to 2201, transaction deleted flag is equal to no and VAT reconciled flag is not equal to reconciled. 

  • 0 in reply to Anita Harper

    Thank you very much Anita - I have never used Filters before - this is certainly something I will use in the future. However, I'm not sure what I am looking at, it for this financial year so far I've posted three vat returns but didn't want to post anything yet until resolving the £7k standing in NC 2201. I can see the JC's for each quarter which agree with the vat returns but then figures don't seem to agree with the previous year and there is a YE 23 Journal from the accountant which is just over £7k although that is dated 31/03/23 so no carry forward figure is there for this years accounting 23/24. Could you suggest another way? I could journal that figure out and put in 9999/9998 for the accountant to look at but I'm worried it is not picking this figure up to be included in any of this years vat returns. Any suggestions would be greatly helpful. Thank You 

  • 0 in reply to Venetia

    Hi Venetia

    Lots of other avenues to explore:

    Are you on VAT cash accounting scheme?  if so, the control account won't zero off as the VAT return only shows paid items. If you are on the standard accounting system you're right, it should net to zero.

    When you ran your last VAT return, did you allow it to include earlier unreconciled transactions? You could run the VAT return again for the last period (back up first). Then look at the reconciliation reports it provides to see if there are earlier transactions that need to be included.

    Try the Filter again on the Transactions screen to look for tax code = T9 transactions then sort on the VAT amount to make sure none of the T9 transactions have VAT on (T9 doesn't get included on the VAT return).

    Could you have used another rogue tax code that doesn't get included on the return? (Settings, Configuration, Tax Codes shows which codes are "in use", in other words they pull through to the VAT return).

    Did the N/L code 2201 balance at the start of the financial year?  You definitely need to know what the accountant's £7k journal was for.  If s/he had found a balance that needed to be reclaimed or paid then a journal would show the liability in the accounts but wouldn't add it to the VAT return.

    Are you using VAT partial exemption method? If so, the unrecoverable VAT needs to be journaled separately.

    It's possible that manual adjustments have been made to the VAT return but then not posted to the nominal ledger.  Note that even if you tick the box on the VAT return screen to post adjustments with the quarter end date, Sage ignores that date and uses the program date, so look also for any journals posted beyond your reconciliation date.

    Good luck!

  • 0 in reply to Anita Harper

    Hi Anita, firstly thank you again for taking the time out to help with my query

    Sage is set up as VAT cash accounting but the way in which I enter and reconcile means there should be a zero on the NC 2201 because I only post what goes through the bank for that quarter, there's nothing posted beyond that date (no future).

    Yes to the question, unreconciled transactions were included in the VAT return

    VAT codes checked in settings and all are correct so no rogue codes used.

    NC 2201 balance at start of financial year £7k this is what the accountants YE Journal referred to but was posted 31/03/2023 to show a zero start to this financial year 23/24 (to clear in account but not add to VAT return) do you think this could have changed the figures going forward that's why there is a balance of £7k Cr?

    Partial exemption is not being used.

    No manual adjustments were made.

    Could I ask you the details of how to Filter to look for the T9 transactions - I haven't used filters before and this method seems to be very helpful - I will look to see if there is any Sage training for this but in the meantime your help would be greatly appreciated.

    Many thanks