the vat returns,errors, and penalties

VAT control account

a control account that collects all the accounting data needed for the VAT Return; it is not a double-entry account

net errors reporting threshold

net VAT errors of £10,000 or less, or 1% of quarterly turnover, subject to a £50,000 maximum limit, can be corrected subsequent VAT Return. Errors over these limits must be separately disclosed to HMRC

VAT Return

the VAT Return is submitted electronically by VAT-registered businesses at the end of each VAT period in order to calculate the amount of VAT due to HMRC or reclaimable from HMRC

bad debt relief

a scheme that allows a VAT-registered business to reclaim any output VAT paid over to HMRC on credit sale which has subsequently gone 'bad' (over six months after the due date)

Making Tax Digital

HMRC's requirement for VAT-registered businesses to keep digital records and submit VAT Returns using compatible software

late submission penalties

a penalty regime where HMRC can impose penalty points if a business submits its VAT Return late on one or more occasions

late payments penalties

a regime of penalties that can be imposed if payments to HMRC are late

Bank of England base rate

the rate of interest the Bank of England charges other banks and other lenders when they borrow money. It is used to calculate late payment interest charged by HMRC (Bank of England base rate plus 2.5%)

VAT notice of assessment

notice issued by HMRC when a business does not submit its VAT Return on time. It will state how much VAT HMRC thinks is owed