Previously filed VAT returns or while filing your VAT returns of the current period, you may find some common errors, adjustments are being made to correct those errors and sometimes you claim your amount too, when you pay high amount of taxes to HMRC.
Types of VAT Return Errors and How to Fix Them?
There are different types of errors found in VAT returns filed before or to be filed by the businesses. The most common errors found are as follows –
You can adjust your VAT return –
If it is above the reporting threshold of £50,000, you must report to HMRC regarding the error.
To correct your VAT return errors you done in the past, you must adjust your account under the following conditions –
- If the amount of errors is below the reporting threshold (i.e. £50,000)
- If it is not done purposefully.
- If it is for an accounting period ended less than 4 years ago.
Note – Your VAT return errors should meet these above conditions. If any error does not meet these conditions, it should be reported to HMRC.
Calculating the net value
To calculate the net value of errors, you must do the following –
How to make the adjustments?
While submitting your tax return, add the net value for tax due to HMRC in box 1 or to box 4 for tax due to you. To make adjustments -
HMRC has given detailed guidance so that you can easily correct your VAT return. If you made an error in VAT return and it is due to carelessness or dishonest behavior, HMRC may charge you with penalties & interest. You can write to HMRC separately regarding the careless errors you have done as well as adjusting your current VAT return. It may help in reducing your penalty.
Note – If you need any help in correcting your errors of VAT return, you can contact VAT correction team of DNS associates by calling 03300291110.
Errors you must report to HMRC
The errors which you must report to HMRC to correct them and which cannot be settled by doing adjustments to your VAT return are as follows –
How to Report the Error?
To report the error, you must fill the form VAT 652 and send the same to the VAT error correction team. You can also send a letter to the VAT error correction team by including all the information requested in the form VAT 652. As a response, HMRC will send you a notice telling you that whether the amount you calculated is correct or not, any tax or interest you owe or not. You will also get a statement showing your current balance. If VAT error correction team does not responds you within 21 days, contact the VAT correction team as early as possible to make sure whether HMRC has received your correction or not.
How to Claim Refund If You Have Paid Extra Tax?
If you have paid extra tax to HMRC, there is a solution to it so that you can claim your refund. You can claim your refund in the following ways –
If you are not sure, whether you are entitled for claim or not, you can ask us by calling DNS associates VAT helpline number 03300291110.
Every business calculates the VAT amount, makes a return and sends it to HMRC. Not every return but some of the returns may contain errors and it is good for you if you solve the same by making adjustments as early as possible before sending it to HMRC. If VAT return containing errors are received by HMRC once, it may leads to charges and penalties.
Any questions? Schedule a call with one of our experts.