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Home » News & Insights » What to do if you make an error in your VAT return

What to do if you make an error in your VAT return

Posted on 18th October 2021

Where an error on a past VAT return is uncovered businesses have a duty to correct the error as soon as possible. Any necessary adjustment can be made on a current VAT return.

However, there are three important conditions that must be met:

  1. The error must be below the reporting threshold.
  2. The error must not have been deliberate.
  3. The error can only relate to an accounting period that ended less than 4 years ago.

Under the reporting threshold rule, businesses can make an adjustment on their next VAT return if the net value of the errors is £10,000 or less. The threshold is further increased if the net value of errors found on previous returns is between £10,000 and £50,000 but does not exceed 1% of the box 6 (net outputs) VAT return declaration figure for the return period in which the errors are discovered.

VAT errors of a net value that exceed the limits for correction on a current return or that were deliberate should be notified to HMRC using form VAT652 (or providing the same information in letter format) and should be submitted to HMRC’s VAT Error Correction team. An email address to send the VAT652 form to has been added to HMRC’s guidance.

HMRC can also charge penalties and interest if an error is due to careless or dishonest behaviour.

Source: Informanagement

Call MJB Avanti | 08000 388799 for help with tax planning and submissions, we assist clients with cash flow forecasts, budgeting, and compliance to achieve their financial; goals.

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Filed Under: News, VAT

Disclaimer:- The information contained herein is given by way of general guidance only and no action should be taken solely on the basis of the information contained herein. The Avanti Group (UK) Ltd will be pleased to provide further guidance on the issues, and how they might affect you. No liability is accepted by the firm for any action taken without seeking appropriate professional advice

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