The form which was used to notify HMRC of VAT return errors that could not be corrected on the next VAT return was known as form VAT652 (Error Correction) and was withdrawn last month.
The procedure for correcting VAT return errors is now as follows:
If you have discovered an error in a VAT return, start by checking whether the error can be amended in the VAT return for the period in which the error was discovered.
Errors can be amended in the next VAT return if:
- The net errors, i.e. output VAT less input VAT errors, are less than £10,000; or
- The net errors are between £10,000 and £50,000 and less than 1% of the Box 6 figure for the VAT return in which the correction is being made.
HMRC have published a new service that allows taxpayers to check whether they need to notify HMRC of any errors on the VAT return – see here.
If the errors cannot be amended on the VAT return:
Any errors which cannot be amended on the VAT return must be disclosed using HMRC’s online error correction service – the service can be accessed using the above link and it requires signing in using a Government Gateway user ID and password.
Anyone who cannot use the online service should notify the error to HMRC’s Error Correction Team by post (BT VAT, HMRC, BX9 1WR) or by email (inbox.btcnevaterrorcorrection@hmrc.gov.uk).
Use the online error correction service to avoid unprompted penalties
It is worth noting that if the error was a result of carelessness, HMRC is still entitled to charge penalties in the event that they discover it at a later date, even if it has already been adjusted on the VAT return. HMRC advise that including the adjustment on the return does not constitute a disclosure. This means that without also notifying HMRC using the online error correction service, unprompted penalties could still be charged.
If you have any VAT queries you can contact Rob Case or a member of his team on 01242 776000 or Tax@randall-payne.co.uk
