Correcting VAT Errors

We all make mistakes.  And VAT Returns, with all their complications, are no exception to this.  Thankfully HMRC has a process in place for correcting VAT errors so there is no need to panic.

How to Correct VAT Errors and Make an Adjustment

If you meet the following conditions you can correct your VAT error on your current VAT return:

  • below the reporting threshold;
  • not deliberate;

If you do not meet all of these criteria you will need to report your VAT error to HMRC on a separate form (see below)

HMRC VAT Error Reporting Threshold

The current rules state that the VAT reporting threshold for an error is:

  • a net value of £10,000 (ie: the difference between what you owe HMRC and they owe you in respect of the error);
  • 1% of your box 6 figure (up to a maximum of £50,000).

VAT Error Correction Form

If you do not meet the above criteria for reporting your VAT error on your current VAT return, then you will need claim for your backdated VAT using a Form VAT652 and post it to the VAT error correction team at:

HM Revenue and Customs 
VAT Error Correction Team – SO864 
NE98 1ZZ 

Regardless of how you need to correct your VAT error, always keep full records and workings detailing out your VAT error.

VAT Error Correction Time Limits

The time limit for correcting a VAT error as set by HMRC is 4 years from the accounting period where the error happened.

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.