How do I refund a pre-payment locked by a VAT return?

[Fredrik]

Dear QF Community. I received a pre-payment three months ago for a project to cover expenses, and I have now sent off the invoice and wanted to allocate the pre-payment to the invoice, but this pre-payment is now locked to the previous VAT period. What is the best way to “refund” and allocate the pre-payment to the correct invoice? I tried to “refund” but the “refund” doesn’t appear anywhere untagged again to be tagged and allocated to the right invoice.

Could you help me with a step by step guide to “refund to”… then… then… then… then tag the refunded amount to the correct invoice.

Or is it quicker and easier to unwind the last VAT submission to unlock the unallocated payment, allocate the pre-payment to the now created invoice and then re-submit the last VAT submission?

[QFMathew]

Hi @Fredrik

If you’re on the cash accounting VAT scheme, then pre-payments would be taken into account for your VAT return, which would explain why it’s been locked.

You can raise a credit note for the payment as you would normally, by following these steps:

1. Go to Sales >> View Clients
2. Find and click on the name of the client this relates to
3. Click View, and select All Payments
4. Find the payment in question, and click on View Details on the same line
5. When you view the payment, you should see a Refund Balance option at the top
6. Enter all the details, and save

Hope that helps

[ian_roberts]

Do you need to refund it? Can’t you just “log payment” on the invoice and “apply from credit” to attach the existing prepayment to the new invoice?

[QFMathew]

Apologies - I seem to have misread the post above and didn’t notice you were trying to actually allocate it to an invoice. In that case, @ian_roberts is spot on. By tagging the payment directly to the invoice rather than refunding it and recreating it would save a headache.