.png)
.png)
Delays with processing VAT error corrections
In Neil Warren’s article ‘Extra time needed’ (Taxation, 20 April 2023), HMRC confirmed its intention to restore a turnaround time of 40 working days within one month, helped by a doubling of staffing resources in the processing team. However, Taxation has since learned of a repayment claim submitted online in April that remained unpaid until the end of August. An HMRC spokesperson has apologised for the delay and confirmed it had been completed.
VAT errors made on past returns must be corrected by a registered entity for the previous four years. If the net amount over or underpaid is less than £10,000, or between £10,000 and £50,000 where the error is also less than 1% of the box 6 outputs figure, then it can be included on the next return rather than being separately disclosed to HMRC, usually on form VAT652.
HMRC has trained additional staff to deal with complex error correction repayment claims submitted by businesses in an attempt to improve the turnaround time. The department is now dealing with most cases within 40 working days and staff are currently working cases received in July 2023. It is expected that complex cases will also be dealt with in the same time period by the end of September 2023.
Independent VAT consultant Neil Warren said: ‘The £10,000 and £50,000 thresholds have been in place since 1 July 2008 – perhaps now is a good time to increase them, at least in line with inflation. This would reduce the volume of claims received by HMRC and help its resource challenges.’
Taxation editorial team.
Contact us
Contributions to Feedback should be emailed to taxation@lexisnexis.co.uk. Letters may be added to Taxation.co.uk as comments to articles. We reserve the right to edit letters or only use extracts.
