Skip to content
Quarterly news:

Winter 2023

What to do when you make a mistake on a VAT return

The basic divide is between errors that need to be reported to HMRC in their own right, and errors that can simply be corrected by making adjustments to the next VAT return.

Time is always of the essence with VAT. Put right anything that’s amiss as soon as it comes to light in order to keep out of the penalty regime.

For errors that need to be reported, HMRC has a new online VAT Error Correction Notice (VAT652) online form. It doesn’t replace the print and post form, which is still available. The online form, however, is now HMRC’s preferred route.

It can be used by signing in through Government Gateway or email address. If using the email option, a security code is sent to the email address given. Having signed in, details of the error can be provided, and HMRC will acknowledge receipt with a notification and unique reference number.

New features include the ability to upload supporting documents, such as calculations or explanatory letters, and the ability to save and complete the form later.

But not every error needs to be notified in this way. Non-deliberate errors can be corrected on the next VAT return if either:

  • net errors don’t exceed £10,000 or
  • are between £10,000 and £50,000 but don’t exceed 1% of the figure in box 6 (net outputs) on the VAT return on which the error is being corrected.

Be aware though, that for penalty mitigation purposes, a correction on the VAT return is not sufficient disclosure.

This means that there may also still be a need to inform HMRC separately of the error.

A description of the image

Call us for an appointment on 020 8343 1660