How Do I Correct Errors in my VAT Return?

Everyone makes mistakes sometimes, and even important records such as your VAT return can be affected if inaccuracies creep into your figures. As a VAT registered business it’s your responsibility to correct any mistakes, even if they weren’t your fault. Fortunately, amending your VAT return is actually fairly easy to do.

How do I fix mistakes in my VAT return?

You can normally correct VAT return errors by making an adjustment in your next return, although this depends on the ‘net value’ of the error, and whether or not it was deliberate.

What is the net value of the error?

You can work out the net value of the error by adding up the additional VAT which is still due to HMRC, and then subtracting the VAT due to you.

Who can correct a VAT return error by making a VAT adjustment?

You can amend an error in your VAT return by making an adjustment in your next return as long as the net value of the error is:

• £10,000 or less
• Between £10,000 and £50,000, but less than 1% of the total value of your sales

What if I don’t qualify for making a VAT adjustment on my next return?

The previous method of submitting a VAT652 Form has been removed, so you’ll need to make the correction online by signing into your tax account or writing to HMRC if the error is:

• More than £50,000
• More than £10,000 and exceeds 1% of the total value of your sales
• The result of a deliberate error

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 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 frequent errors may result in a penalty.

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