HMRC has confirmed that businesses can no longer use form VAT652 to correct errors in VAT returns. Going forward, corrections must be made either online, in writing, or by adjusting the next VAT return.

1. What’s changing

The VAT652 form has been withdrawn. Businesses must now notify HMRC of any VAT return corrections within the four-year time limit using one of the following methods:

• Adjusting the next VAT return (the recommended approach)
• Submitting the correction online
• Sending details in writing to HMRC’s VAT Error Correction Team

2. How to make a correction under the new rules

The simplest method is to adjust your next VAT return. To do this, calculate the net value of the error and:

• Add the net value to Box 1 if VAT is owed to HMRC, or
• Add the net value to Box 4 if VAT is owed back to you.

When making a correction, it’s advised you keep clear records of the error, including:

• when it was identified
• how it arose
• the VAT amounts involved

If you choose not to adjust your next return, or if the error was deliberate, you must notify HMRC either online or in writing. Be aware that HMRC can issue penalties for careless or deliberate errors, although no penalty will apply where you can demonstrate reasonable care was taken.

There are two important exceptions to note:

• Time of supply (tax point) errors: where VAT was declared in the return immediately before or after the correct period, provided the later return is within the four-year limit.
• Deliberate errors: the four-year time limit does not apply.

3. Need help?

Whether you’re already a Wheelers client or are simply looking for guidance, our team is here to help. If you’ve identified an error, taking the correct steps is important.

Please get in touch with your usual Wheelers contact — or reach out to us directly — and we’ll help you put things right with HMRC and make the process as straightforward as possible.