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Correcting errors in your VAT return

August 5, 2025

It is easy to make mistakes when completing your VAT return. However, where mistakes are made, it is important to correct them. This is fairly straightforward to do.

Four-year window

You can correct errors in your next VAT return if the error was made in the preceding four years and it is either less than £10,000 or between £10,000 and £50,000 but less than 1% of your total sales value.

Errors that are more than £50,000 or more than £10,000 and greater than 1% of the total sales value must be notified to HMRC separately, as must deliberate errors. This can be done using form VAT652 or online. HMRC have a tool which you can use to see which method is appropriate for you (see www.gov.uk/guidance/check-if-you-need-to-report-errors-in-your-vat-return).

The net value of the error is the additional tax due to HMRC less any tax that is due to you from HMRC.

Adjusting your next VAT return

If your error falls within the limits permitted for correction in your next VAT return, the action that you need to take depends on whether, as a result of the error, you owe VAT to HMRC or HMRC owe you VAT. Where you owe VAT to HMRC, you need to add the amount of the error to the box 1 figure. Where HMRC owe VAT to you, the error is added to the box 4 figure. You will also need to keep details of the error, including how it arose, when it was discovered and the amount of VAT involved. You will also need to correct your VAT account.

Interest and penalties

If the error results in VAT being due to HMRC, interest and penalties may be charged. Where VAT is paid late, interest is charged from the date on which it was due to the date on which it was paid. If the payment is made more than 15 days late, late payment penalties will also apply.

If the error results in a VAT repayment, repayment interest may be paid.

VAT Return

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