VAT errors

I finished drawing up my books for the year ended 31 December 2010, and realised I'd made an error with my VAT. I think when I totalled up the input VAT for the June quarter, I missed out a whole page of my cashbook expenses. Am I able to reclaim this now somehow?

1st April 2011

You may correct errors that arose in VAT accounting periods that ended up to four years ago.

At the end of your VAT accounting period, if the net value of previous return errors is less than £10,000 and 1% of the Box 6 figure on your VAT return for the period when you discover the error (subject to an upper limit of £50,000), then you can make the adjustments to correct the error on the next return.

As your mistake was not deliberate or careless, no penalties or interest should arise.

However, if you had made a deliberate or careless error, you could have been required to separately notify HMRC and in this instance, HMRC would probably have levied penalties which can be up to 100% of the error.

In conclusion, you will be able to reclaim the input VAT on your next return provided it meets the criteria above.

If you would like further guidance on this area, please feel free to contact your local TaxAssist Accountant.

 

By Jo Nockels

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