Correcting errors in VAT returns


13/06/2024

Where an error on a past VAT return is uncovered businesses have a duty to correct the error as soon as possible. As a general rule, any necessary adjustment can be made on a current VAT return. To do this, the errors must be below the reporting threshold.

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 total declare sales value for the return period in which the errors are discovered.

HMRC must be separately notified of errors that exceed either of the limits set out above or if the error was deliberate. 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 by making the correction online or submitting form VAT 652 (or providing the same information in letter format) to HMRC's VAT Error Correction team.

HMRC can also charge penalties of up to 100% of any tax under-stated or over-claimed if you file an inaccurate return.


Contact us

Williamson West
10 Langdale Gate
Witney
Oxfordshire
OX28 6EX
 
01993 774555
ww@williamsonwest.com

Newsletter Sign Up

With our newsletter, you automatically receive our latest news via e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login

Membership

Follow us

Newsfeed Search


JUMP TO TOP