VAT Notice 700/45 How to correct VAT errors and make adjustments or claims has been updated. The Notice sets out how to amend a business’ VAT records if errors have been made, how to correct errors on VAT returns, and how to claim a refund if VAT declarations have been overstated. The changes are:
- information on how and when to correct VAT errors
- what happens if corrections are not made
- information about claiming input tax
- more information about how underpayments and overpayments are paid
- HMRC’s response time after receiving an error correction
- clarification of the unjust enrichment rules
- the reimbursement scheme
- how HMRC repays interest owed on overpayments
Additionally, HMRC’s guidance: Check how to tell HMRC about VAT return errors has been updated.
This guidance explains the requirements for updating a VAT return, and how to make a correction online or tell HMRC in writing about errors. The update states that it is no longer possible to correct errors on VAT returns using form VAT652.
Basically, the guidance sets out how to report errors of £10,000 or more (net of all errors). This broadly comes down to using the online service or adjusting a current VAT return.
Please see our flowchart on error reporting Error Reporting Flowchart