Hi Lynsey,

Thanks for using Sage City.

The design for this feature was back in 2019. Initially, this wasn't blocked but during the development HMRC stated they wanted a reduced-rate tax code. We implemented T26 with the downside that negative lines had to be blocked due to you being able to use T21 and T26 on the same invoice. The reason it was blocked is that each tax code has different tax rates which resulted in the printable invoice displaying the wrong VAT values. (This is similar to the block we have if you had T1 & T0 on the same invoice when we introduced negative lines back in 2016)

It was decided that a credit note should be raised in these scenarios rather than using negative lines.

I can appreciate it's frustrating if you expected something to work in a certain way but hopefully, my answer clarifies why we made the decision we did. You can raise your idea for change here >> Sage 50 Accounts and Sage 50cloud Accounts Ideas

If this has answered your question please click More > Verify Answer.

Regards,

Ian

But you can't use T26 with T1 as this has also been blocked, as I now cannot duplicate an older invoice with many lines on and change the VAT code on each line from T1 to T26 as it is not allowed. I have to create a new invoice altogether rather than amend an older one on the same project. So why block a negative line with the same VAT code? sorry but I don't think it makes sense.

It certainly doesn't make sense to have to create an invoice and then a separate credit note for retention held, when you are creating a receipt for a payment made.

Sadly, it is as though Sage do not understand the construction industry at all sometimes.

Yeah, negative lines doesn't work when you have a mixture of tax codes due to the VAT differance (Not just restricted to CIS). The reason we ask you to create a separate credit note as a workaround is because that's what negative lines does, it posts the invoice then a credit for the negative line. 

I think the restriction around not being able to duplicate and change tax codes is something we can likely change. I'd recommend logging this feedback on our ideas board. Other customers can then vote on them. >> Sage 50 Accounts and Sage 50cloud Accounts Ideas

The development team does read this forum and we'll look to correct things where they're not quite hitting the mark. I've personally made a note of your feedback around the mixture of tax codes and duplicate.

Ian (Sage 50 Development Team)

That's the thing, it would be the same tax code, I could understand it if the negative line was a different tax code to the invoice line.

Also, being able to change the tax code from T1 to T26 would be good and again, it not being able to save if the tax codes were different would be workable.

I think we had challenges around knowing it was a "Reverse Charge CIS" tax code vs knowing the rate of standard vs reduced at the point you selected each line. Again this is maybe something we can revisit.

I think changing from T1 to T26 would be something we can do. Instead of validating on changing of the tax code we can validate on saving to make it a better experience. 

Ian

I think one of the problems is that I have been asking what changes were being made for the past 2 years and have never been actually told what was changing, so we as a company could prepare for the changes. the only thing we were ever told was that the VAT code was being implemented and that the accounts would take care of it. Not what was going to go on behind the scenes. So now it has actually happened it has affected the way we process things and now have no time to do anything about it. 

It's a shame that we weren't able to provide you with the details of what the changes were. This guide may help if you have any unanswered questions >>

• How will the new CIS Reverse Charge work in my software?

We finished this feature in August 2019 with the changes from HMRC coming in from October 2019. HMRC delayed the changes until now, however the feature has been available in the software to try out since v26 (2019)

We did show it to some customers prior to release (you can be apart of that panel if you wanted to be) but the feature is only really now starting to be used by customers. This is where we'll gather feedback to improve it based on usage. We want to get it right and will try to correct it where possible.

Ian

Hi Lynsey,

I wanted to let you know that we've begun looking into making negative lines and CIS Reverse charge work for v27.2.

I've also logged an issue around not being able to change T1 to T21 without getting an error in relation to your duplicate issue. I have suggested we move the validation to Save rather than per item line.

Thank you again for providing this feedback.

If this has answered your question please click More > Verify Answer.

Ian

Thank you very much. You have just made an old woman very happy lol

We are the same and I think this is very common in the construction industry; we do large contracts where we bill "Contract Works to date", LESS previous application, LESS retention. I am now going to have to raise invoices out of sage manually and then journal the amounts on to sage. So duplicating my month end invoicing and taking much more time. I just can't believe that when designing this no one spoke to people in construction to realise this was really important.