Payments and the VAT Split {#payments-and-the-vat-split}

When a payment is recorded, CaseConnect automatically works out what that money was made of — how much was profit costs, how much was disbursements, and the VAT carried by each. There's nothing to fill in for this; it's derived from the invoice and shown read-only underneath the payment in the invoice's payments list, under "Made up of:" — Profit costs, VAT, Disbursements, VAT.

This is what makes cash-basis VAT reporting and accurate disbursement recovery possible — see Reports.

Your firm can choose which element a partial payment is applied to first — disbursements or profit costs — in Settings → Billing Settings. Most firms take disbursements first, so the firm isn't left financing a client's third-party costs out of its own fee income; this is the default. VAT always follows the element it was charged on and is never a separate choice.

When a payment's split can't be worked out

Some payments — usually a partial payment against a client-account balance, or an invoice migrated from another system — can't be automatically split. These show "Not recorded — what this receipt was made of is unknown" instead of a breakdown, and are deliberately not treated as £0 in any report.

Go to Billing → Composition Exceptions (in the Reports & Settings panel on the Billing dashboard) to see every payment this applies to. Anyone can view the list; if you have the permission to do so, you can also record the split by hand from here (marked "Corrected by hand" afterwards). Ask your Firm Administrator if you need that permission.

---