As with all things in life, errors can crop up in your VAT records – especially if you’re busy running your own business. Unfortunately, it’s your responsibility to correct any mistakes, even if they weren’t your fault.
How do I correct mistakes in my VAT return?
You can normally correct VAT return errors by making an adjustment in your next return, depending on how the net value of the error, and whether or not it was deliberate. Work out the net value of the error by adding up the additional VAT due to HMRC, then subtracting the VAT due to you.
You can simply make an adjustment in your next VAT return as long as the net value of the error is…
You must use a VAT652 form to tell HMRC about errors if they are…
£10,000 or less
Between £10,000 and £50,000, but less than 1% of the total value of your sales
More than £50,000
More than £10,000, if they exceed 1% of the total value of sales
Comprehensive VAT return service
From only £25.00 per month
What will happen next?
Once you report the details of any VAT return errors, HMRC will work out if this means you previously claimed too much VAT back, or simply didn’t pay enough. If either of these is the case, you might need to pay interest on the amount that you owe.
HMRC don’t expect people to get it right every time, though making frequent errors may result in a penalty.
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About The Author
I'm an experienced and fully AAT and ACCA qualified accountant, who is enthusiastic about helping business owners succeed. I also love cooking and needlepoint (at different times!). Learn more about Beth.