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HMRC internal manual

VAT Assessments and Error Correction

Error correction for VAT: Correction methods: Introduction

There are two methods a person can use to correct errors they discover in previously submitted VAT returns. The choice of method depends on the net value of the errors, see VAEC7150.

They can either

  • Adjust their VAT account and make a separate notification in writing, see VAEC7120, or
  • Adjust their VAT account and include the net value of the adjustment in the VAT return for the period of discovery, see VAEC7140.

The first method must always be used if the inaccuracies in the previous return were made deliberately. This is because the person knew about the inaccuracy when the previous return was submitted. It cannot therefore be discovered at a later time. See VAEC7700 for guidance on the disclosure of deliberate inaccuracies for the purpose of penalties.

The second method can only be used if the net value of the errors does not exceed certain limits. For details of the limit for errors discovered in prescribed accounting periods beginning before 1 July 2008 see VAEC7170 and for periods beginning on or after 1 July 2008 see VAEC7180.

The general time limit within which errors can be corrected is four years from the end of the prescribed accounting period in which the error occurred, VAEC7410 provides further guidance on time limits.