HMRC has launched a new online service for the correction of errors made on previous VAT returns. Previously, a business must have emailed a correction to form to: inbox.btcnevaterrorcorrection@hmrc.gov.uk (it is still possible to use this method of reporting). The Form VAT652 – “Tell HMRC about any errors in your VAT Return” is used for any corrections of £10,000 (net of all errors) or more of VAT.
Correcting errors on your VAT Return
HMRC have announced that, due to coronavirus, it will no longer be accepting paper copies of VAT652s by post.
If an error is discovered on a past VAT return it is necessary to report it to HMRC on form VAT652 if it is £10,000 (net of all errors) or more of VAT. More details here
A business must now email its VAT652 form to:
inbox.btcnevaterrorcorrection@hmrc.gov.uk
Telephone
A business can call to check HMRC has received its error correction notification if it has not had an acknowledgement after 21 days.
Errors cannot be corrected over the phone.
Telephone: 0300 200 3700
This is said to be a temporary measure, but I cannot see why HMRC would revert to a paper based system when the virus poses less of a threat.
Remember: stay in!
Error Correction – belt and braces
If an error is discovered on a past VAT return it is only usually necessary to report it to HMRC (on form VAT652) if it is £10,000 (net of all errors) or more of VAT.
However, because of the current penalty regime it is important to ensure that any adjustment qualifies as an unprompted disclosure. Consequently, we recommend that a letter similar to that below is sent to HMRC in cases where errors below £10,000 have been adjusted on a current return.
“RE: Letter of disclosure; error on return for period XXXX
We disclose, (on behalf of our above named client), that the VAT return for the period XX/XX contained an inaccuracy.
Reason, eg; Due to a processing error, three sales invoicing totalling……
This resulted in the net VAT due for the period being understated by £XX
As the error is within the limits for correction on the next VAT return, this error has been corrected on the return for the period in which the error was discovered, namely the period XX/XX. No further action to correct the error is therefore necessary.
Please treat this letter as an unprompted disclosure of an inaccuracy. Alternatively, please advise me of any further details that you may require in order that that this letter may be treated as such.”
It is accepted that this course of action may prompt enquiries, but it is our view that that is preferable to having a potential ticking time bomb.
Please contact us should you have any queries on error disclosure.