Correcting VAT errors made by HMRC

HMRC are withdrawing Business Brief 28/04 item 2 ‘VAT - correcting liability errors’ with effect from 1 August 2011.

The move is to take account of the announcement in Revenue & Customs Brief 15/09 concerning VAT Misdirection Extra-statutory Concession 3.5 which confirmed that the Revenue is bound by incorrect advice only in the circumstances explained in its guidance ‘When you can rely on information provided by HMRC’.

Taxpayers are usually required to apply the new interpretation of the law only from a current or future date that HMRC will announce when advising on the correct interpretation.

If however a business chooses to correct historical errors the department will accept the...