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HMRC internal manual

VAT Assessments and Error Correction

Error correction for VAT returns: Processing: Under-declarations and repayment supplement

Where an error notification includes over clams of input tax, or under declarations of out put tax, which relate to a period that attracted repayment supplement, a related proportion of the repayment supplement may also be recoverable where this exceeds the £50 de minimus level.

In this situation the correct procedure is as follows

Where repayment supplement (RS) has been paid (RS details appear on the Trader Report D1600 series) and an under-declaration is subsequently raised on the period, a default surcharge action print (DSAP) is automatically produced and forwarded to the Repayment Supplement Team Electronic Folder (EF) in-tray.

They will then calculate if the RS has been overpaid and initiate recovery or amendment action as necessary.