Sales Tax Control Account
Current LiabilitiesThis holds the VAT the business has charged customers on sales, which is owed to HMRC. It's a liability account and normally carries a credit balance — output VAT charged on sales increases it (credit), and payments made to HMRC decrease it (debit).
Real-world examples
Consultancy
A consultancy charging entirely standard-rated fees has a simple relationship between turnover and 2200: output VAT is just 20% of net sales. £15,000 of fees invoiced in the quarter means a credit of £3,000 to 2200 alongside the £15,000 credited to sales — the balance at quarter end moves in lockstep with sales.
Bakery / food retailer
A bakery's 2200 balance is far less predictable relative to turnover, because most of what it sells is zero-rated (bread, cakes) while hot food, eat-in items and drinks are standard-rated. £2,000 of hot pasty and coffee sales attracts VAT — a credit of roughly £333 to 2200 — while an adjacent £2,000 of cold bread sales adds nothing to 2200 at all. Two shops with identical turnover can end up with very different output VAT depending on their sales mix.
Construction
A builder's 2200 balance depends heavily on the type of work done that quarter — a new-build house is normally zero-rated, so a £50,000 new-build contract adds nothing to 2200, while a similarly sized renovation or extension is standard-rated, adding roughly £8,333 of output VAT. Getting the zero-rated/standard-rated split wrong is one of the more common and costly VAT errors in construction.
Commonly confused with
Because code 2201 (Purchase Tax Control Account) sits right next to this one in Current Liabilities, it's a common mis-posting target. Code 2200 is specifically for sales tax control account, while 2201 covers purchase tax control account — similar in nature, but keeping them separate is what makes the current liabilities section of your management accounts meaningful rather than a single lumped total.
What a mis-posting here costs you
An error posting to Sales Tax Control Account misstates what the business owes, and for a Current Liabilities code specifically it can distort the working capital and current ratio that lenders and suppliers look at when assessing short-term financial health.