Made a mistake on your VAT return? Here’s what you need to do

If you realise you’ve made a mistake once you’ve submitted a VAT return, try not to panic! You should be able to either correct the error manually or report it to HMRC. This simple guide explains what to do in both scenarios.

Correcting an error manually

In certain circumstances, you can correct an error that you made in a previous VAT return by adjusting a future VAT return. You can do this if the error:

  • was made in a return for an accounting period that ended less than four years ago
  • had a net value (any VAT you overpaid minus any VAT you underpaid) below the HMRC reporting threshold of £10,000
  • was not deliberate (you should notify HMRC of any deliberate mistakes by following the instructions below)
  • had a net value of between £10,000 and £50,000 (but less than 1% of the sales your reported in box 6 on the VAT return for the period in which you found the mistakes). You can work out how much your net error is by subtracting any VAT you overpaid from any VAT you underpaid.

If the errors you’ve made meet the above criteria you can amend them in your next VAT return by adding the net value to box 1 (tax owed to HMRC) or box 4 (tax due to your business) of your VAT return.

If the errors on your VAT return do not meet the above criteria you’ll have to contact HMRC to report them.

You should ask an accountant if you’re in any doubt about whether an error on your return meets the above criteria.

Reporting an error to HMRC

If you need to report a VAT return error to HMRC because it doesn’t fit the above criteria, you should fill out form VAT652 and send it to HMRC. You can download the form online through the above link or you can call HMRC on 0300 200 3700 and ask them to send you a form in the post.

While it’s possible to make an error report to HMRC without form VAT652, having one should make the process much easier. If you’re unable to access a form you can write to HMRC directly to report an error at:

HM Revenue and Customs

VAT Error Correction Team - SO864


NE98 1ZZ

United Kingdom

When you contact HMRC they’ll need to know a few details about the error(s) you’re reporting, so make sure you have the following to hand:

  • details of how each VAT error arose
  • the VAT accounting period in which the error(s) occurred
  • if the mistake was an input tax or output tax error
  • the amount of VAT under-declared or over-declared by your business in each VAT period
  • how you calculated this amount
  • whether any of the errors reporting resulted in your business paying HMRC an amount that wasn’t due
  • the total amount of VAT to be adjusted

HMRC’s VAT Notice 700/45 provides detailed information about correcting VAT errors but you should consult with your accountant if you have any concerns about your VAT return.

VAT error correction in FreeAgent

FreeAgent allows you to correct invoices, bills, expenses and transactions even after you’ve filed your VAT return online.

If you need to make an edit to correct an error, FreeAgent’s MTD-compliant VAT software will preserve your existing VAT return and include the correction in your next return - exactly as HMRC expects!

Remember that you can only correct errors manually in FreeAgent if they meet the above criteria, so check with an accountant if you are unsure.

To help prevent future errors check out our simple VAT calculator.

Disclaimer: The content included in this guide is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this guide. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.