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What should you do if you make an error on your VAT Returns?

What happens if you make an error on a VAT Return?

VAT returns can be a complex part of your business and you may have submitted returns with errors.

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


Correcting errors on your VAT return

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.

However, 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.

Work out the value of your VAT error

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, or for help making corrections, contact our expert advisors for guidance. We would be happy to help you on this topic and other tax-related issues.