I have discovered that if you have allocated a payment to the wrong invoice and then re-allocate it to the correct one, and you are set up for cash accounting, then Kashflow will include the vat in the next vat return (even though the payment has already generated the vat when the payment was made. So the result is that the vat is accounted for twice!!!
This is obviously a very dangerous situation and should at least generate a warning if you try to do this, however I do not see why this action should generate Vat as in all other accounting systems that I have used it is only a payment that generates vat for cash accounting.
I agree that there should be a warning to the user that reallocation of the payment is going to duplicate the VAT. As currently it is too easy to unallocate a transaction, without considering the implications of doing so.