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‘Stop digging’ is the advice from MIKE THEXTON as he examines the rules for correcting VAT errors
KEY POINTS
- How to avoid an ‘incorrect error correction’.
- An analysis of the decisions in Stirling and Starglaze.
- The legislation in SI 1995/2518 and the limits applying to error correction.
- The voluntary disclosure process and requirements.
- Avoiding a penalty charge.
VAT law being what it is the adage might be rewritten as ‘to err is inevitable’. The forgiveness of HMRC depends on following the correct procedures which may require divine guidance.
HMRC’s own version (Notice 700/45 (July 2009)) contains the opaque threat that ‘where careless or deliberate behaviour results in an incorrect error correction notification being made under Method 2 you will be subject to a penalty’.
This article outlines the ways in which traders can avoid making an ‘incorrect error correction’.
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