What is the difference between VAT control and VAT suspense?

There are two VAT accounts in QuickBooks: VAT control and VAT suspense.

What is VAT control?

The VAT control account is the default account in QuickBooks Online. VAT from transactions that have not yet been filed with HMRC will post to this account. This is where all of the VAT that makes up the return is stored.

The amount in this account will be used to calculate your VAT return on the applicable dates. Any transactions (such as journals) that post to the VAT control account without VAT will not appear on the VAT return.

What is VAT suspense?

The VAT suspense account contains the amount that has been submitted to HMRC but has not yet been collected or refunded. This is where the VAT filing is kept once it is marked as filed in QuickBooks Online.

When you submit the VAT return to HMRC or mark the period as filed in QuickBooks, the filed amount will be moved from the VAT control account and into the VAT suspense account. The amount is held here until you submit your payment to HMRC.

The amount will be taken from the VAT suspense account and the linked bank account.

Submitting a return to HMRC

Once you file your VAT return, it can't be unfiled in QuickBooks.

If you make a mistake, let's say a transaction was left out or you made changes to a transaction that belongs to a closed VAT period, QuickBooks will recognise that the transaction belonged to a closed VAT period based on the transaction date.

You'll see a warning, but you'll be able to save the transaction. The transaction will be included in the current VAT period and show in a VAT exception report. Transactions that show on the exception report usually don't belong to that VAT period, but they are included as they were left out of the last one.