Reconciliation Exceptions

This guide provides a step-by-step process for managing transactions that contain Tax/VAT values but were set to 'Ignore (Out of Scope)' during mapping. These entries are flagged as Exceptions. This guide walks you through how to resolve these conflicts, as these transactions will remain in the 'Exception' state until they are correctly assigned to a tax return.

We strongly advise against proceeding with this tax submission until these transactions are corrected. These entries will cause discrepancies when attempting to reconcile the tax control account in your accounting software.

1) When creating a tax submission, the system verifies that no transactions categorised as 'Out of Scope (Ignore)' contain a tax value. If transactions with a tax value are detected, the following message will be displayed upon generating the submission:

The warning also include the list of impacted tax rates - these are the ones that we believe should be moved out of the Out of Scope section in the mapping.

It is strongly advisable to cancel this process and address the incorrect transactions from the mapping screen. You have likely mapped a tax rate to the 'Out of Scope' section in error.

2) Should you choose to proceed and Save the submission, the same error will remain visible within the tax submission screen as a persistent alert.

3) The Exceptions tab will also list all transactions that have been impacted by these mapping errors.

4) When you hover over the exception, the system will display a tooltip explaining that this entry must be handled before proceeding:

Cancelling the submission, amending the mapping, and regenerating the submission is the recommended approach to resolve this error.

How to solve submitted transactions

If you submit a return while these reconciliation exceptions exist, they will appear again in your next submission. These transactions will continue to accumulate in the Exceptions tab, repeating this error in every subsequent period until the underlying mapping issue is resolved.

1) To resolve this, navigate to the Mapping page and reassign the relevant tax rate to its respective box instead of the 'Out of Scope' section. Once updated, these transactions will be automatically converted into standard 'Out of Period' exceptions in your next submission.

2) You can read more about how to handle and resolve these exceptions in this help article about Exceptions in generate.TAX.

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