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HMRC internal manual

VAT Assessments and Error Correction

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HM Revenue & Customs
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How to assess and correct: VAT Amendments: VAT656 summary of notice section

This part of the VAT656 informs the trader of the total assessed amounts of tax and interest. The summary contains

Tax

This is the net amount of tax due to or from HMRC, taking into account this amendment.

Misdeclaration Penalty (MP)

For periods after 1 December 1993, MP will not be included. Where a period prior to 1 December 1993 is revised downwards the summary will not show negative amounts and MP will be shown as nil. The recalculated amount of penalty will appear on an accompanying VAT666.

 Interest

Interest will be recalculated on the whole OA as a result of inputting the VAT643. If the trader has made a payment against the original OA this will be taken into account when the recalculation is carried out.

If the trader has not paid or did not make full payment of the tax within 30 days of the issue of the OA they will have entered into the further interest regime. The interest shown on the VAT656 will supersede any further interest notified to the trader on that OA.

As there is no such thing as negative interest, it can never appear in the due from HMRC column.

 Totals

Sub totals of the amount of tax, penalty prior to 1 December 1993, and interest due to and due from HMRC and the total amount payable, or repayable, appear in the appropriate boxes.