VAT return errors – What should you do?

VAT returns can be a complex part of your business and you may have submitted returns with errors previously when you were less knowledgeable of what you had to do.

But do not worry, these errors can be corrected as long as they meet certain criteria.

Any errors for the previous four years in VAT returns can be corrected if the value of the errors are:

-        £10,000 or less

-        Between £10,000 and £50,000 but make up less than 1 per cent of the total of your sales

If your errors come under the above criteria, then you can make a correction in your next VAT return.

If your errors are:

-        Over £50,000

-        Over £10,000 and exceed 1 per cent of your sales

-        Purposeful errors

You will need to inform HM Revenue and Customs (HMRC) about these and have a separate discussion to amend them.

Value of your errors

You can calculate the value of errors you have made by adding up the extra tax that you owe to HMRC and then subtracting the tax you are due back.

Any deliberate errors need to be discussed with HMRC separately so cannot be included in this.

When you submit your next VAT return, you should add the tax you owe HMRC to box one and the tax you are owed to box four.

Alternatively, you can inform HMRC of errors by filling in the online form or form VAT652.

To avoid making any errors in your VAT returns, contact our expert advisors for guidance.

We can provide you with advice on this topic and other tax-related issues and are happy to help.