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
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.