VAT Errors can happen due to a variety of
circumstances – and far too many and various to list here.
However, in an instance where an error has been identified, there could be an underdeclaration or even overdeclaration of VAT due on sales, or too much or not enough VAT reclaimed on inputs.
Whilst accounting software will generally include any prior period adjustments in a current VAT period, this may not be the “correct” way of doing so.
It can be done this way if the error is below £10,000, or between £10,000 and £50,000 but less than 1% of the total value of your sales.
It may also be possible to make the correction online.
If it exceeds these thresholds, HMRC needs to be notified using a form VAT652.
HMRC guidance is available here but we recommend you contact us to discuss in the first instance should you uncover any significant errors or mistakes.
