Let’s face it — VAT returns aren’t always straightforward. With all the numbers, boxes and deadlines, it’s easy for mistakes to creep in.
But don’t panic. If you’ve spotted an error, the good news is that correcting it is usually quite simple — and the sooner you act, the better.
Here’s everything you need to know about putting it right.
Can You Fix It on Your Next VAT Return?
Most errors can be corrected in your next VAT return — as long as they meet a couple of conditions.
You can fix it yourself if:
- The error was made within the last 4 years
- The net value of the error is under £10,000, OR
- It’s between £10,000 and £50,000, but less than 1% of your total sales
What’s the “net value”? It’s the extra VAT you owe to HMRC minus any VAT HMRC owes you.
When You Need to Tell HMRC Directly
If your error is:
- More than £50,000, or
- More than £10,000 AND greater than 1% of total sales, or
- Was a deliberate error
… then you’ll need to report it separately to HMRC using form VAT652 or by completing an online disclosure.
Not sure which route to take? HMRC has a handy tool to guide you:
Check if you need to report errors in your VAT return
How to Adjust Your Next VAT Return
If your error meets the criteria to be corrected in your next return, it’s time to amend the figures.
Here’s what to do:
If you owe VAT to HMRC:
Add the value of the error to Box 1 on your return.
If HMRC owes you VAT:
Add the value of the error to Box 4.
But don’t forget — you also need to:
- Correct your VAT account
- Keep a clear record of the error, including:
- How and when it was discovered
- What caused it
- The amount involved
Good bookkeeping now could save a headache later.
What About Interest or Penalties?
If your mistake means you underpaid VAT, HMRC may charge:
- Late payment interest (from the due date to the payment date)
- Penalties, if you’re more than 15 days late
On the flip side, if HMRC owes you VAT, they might pay repayment interest. So there’s a small silver lining if the error was in your favour!
Need a Hand Fixing a VAT Error?
We know VAT can be complicated — and even the best-run businesses slip up from time to time. The important thing is getting it sorted properly (and quickly!) before it becomes a bigger problem.
If you’ve spotted an error in your return and aren’t sure what to do next, just give us a shout. Jon and the team are here to help make things right — and keep you on the good side of HMRC.
Contact us today and let’s fix it together.
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Any questions?
If you’d like a meeting or a video call to discuss this, please get in touch with your favourite Liverpool accountant
- You can ring us on 0151 380 8080
You can email us at gr****@*********************co.uk