Error on my VAT return. : ARGHHHHH !

Discussion in 'Accounts & Finance' started by Justin Smith, Oct 18, 2017.

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  1. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    576 59
    I accidentally put the figure for net VAT due into the VAT return box for reclaimable VAT but didn`t realise my error till I`d already filed the return and had the pdf back. In the dim an distant past I remembered that trying to correct VAT error is a nightmare, and that is what it seemed to be when I tried to fill out a VAT652 form.... To be frank I didn`t even understand half the questions and when I tried to phone the help line I was throwing the phone against the wall being forced to talk a bleedin` computer (I can`t stand having to do that) so I gave up on that one. Can I not just make a compensatory error on the next return to balance it ? It`d be far simpler and it`s only for £850 anyway.
     
    Last edited: Oct 18, 2017
    Posted: Oct 18, 2017 By: Justin Smith Member since: Jun 6, 2012
    #1
  2. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,662 779
    From HMRC VAT Publication:

    4.3 Method 1: for errors of a net value that do not exceed £10,000, or errors of a net value between £10,000 and £50,000 that are within the limits described below
    You can use this method to adjust your VAT account and include the value of that adjustment on your current VAT return providing:

    • the net value of errors found on previous returns does not exceed £10,000
    • the net value of errors found on previous returns is between £10,000 and £50,000 but does not exceed 1% of the box 6 (net outputs) VAT return declaration due for the return period in which the errors are discovered

    To work out the net value of VAT errors on previous returns, you should work out:

    • the total amount due to us, if any
    • the total amount due to you, if any

    If the difference between the two figures is greater than £10,000 and exceeds 1% of the box 6 (net outputs) VAT return declaration due for the current return period during which the error is discovered, you must use Method 2. You must always use Method 2 if the net errors exceed £50,000 or if the errors made on previous returns were made deliberately.

    Correcting errors using Method 1 is not a disclosure for the purposes of the new penalties rules described at paragraph 4.1 above. If you consider that the error corrected using Method 1 was a result of careless conduct you will not be able to gain the maximum reduction of the penalty unless you also notify us separately in writing, either by letter or by completion of the form VAT652, of both:

    • the error
    • your grounds for seeking a reduction to the penalty

    This will be an unprompted or prompted disclosure depending on the circumstances.
     
    Posted: Oct 18, 2017 By: UK Contractor Accountant Member since: Sep 18, 2013
    #2
  3. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    576 59
    So does that mean I can just use a compensatory error on my next VAT return ? I will, after all, have over paid them first, and underpaid them second. As I said the VAT652 form is a nightmare.
     
    Posted: Oct 18, 2017 By: Justin Smith Member since: Jun 6, 2012
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  4. Scalloway

    Scalloway UKBF Legend Free Member

    15,234 3,225
    Yes for VAT errors of under £10,000 of VAT you just adjust the next VAT return unless the net value of errors exceeds 1% of the box 6 (net outputs).
     
    Posted: Oct 18, 2017 By: Scalloway Member since: Jun 6, 2010
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  5. Justin Smith

    Justin Smith UKBF Enthusiast Full Member

    576 59
    Posted: Oct 20, 2017 By: Justin Smith Member since: Jun 6, 2012
    #5
  6. Scalloway

    Scalloway UKBF Legend Free Member

    15,234 3,225
    I've lived here for 30 years and I agree. The transmitter is across the valley directly opposite my house but the photos don't include it. Probably because I'm next door to the other Scalloway landmark, the quarry.
     
    Posted: Oct 20, 2017 By: Scalloway Member since: Jun 6, 2010
    #6
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