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HMRC internal manual

VAT Assessments and Error Correction

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HM Revenue & Customs
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Error correction for VAT returns: Time limits: Time of supply errors

Generally a person cannot correct, and HMRC cannot assess, errors in previously submitted VAT returns where the errors arose in prescribed accounting periods that ended more than four years earlier.

Note: However, see VAEC7410 for further guidance on time limits and VAEC7700 guidance on deliberate inaccuracies.

An exception to this general rule is time of supply errors, often referred to as tax point errors. A time of supply error occurs when a person has declared an amount of VAT on a return which immediately precedes, or follows, the return for which the amount was actually due.

HMRC cannot make an assessment to correct an error where

  • a person has incorrectly declared an amount of VAT in the return period following the period in which the amount was due, and
  • the preceding period is more than four years old.

However, HMRC will only accept an error correction for the later period if the person has taken into account both the under-declaration and the over-declaration resulting from the error.

HMRC can make an assessment to correct an error where

  • a person has incorrectly declared an amount of VAT in the return period before the period in which the amount was due, and
  • the later period is less than four years old.

However, HMRC will take into account both the under-declaration and over-declaration resulting from the error.

The legislation covering time of supply errors is at

VATA94/S1(2)

VATA94/S6

VATA94/S81(3).