Readers’ forum: Should taxpayers submit form VAT652?

Readers’ forum replies to queries relating to VAT errors consistently advise that HMRC should be separately informed of VAT underpaid even when an error has been correctly rectified on the next VAT return after discovery of the error in order to be treated as an unprompted disclosure of a non-deliberate error. This is to prevent any financial penalty (which has also been my understanding of the appropriate procedure).

However for a non-deliberate error that is of insufficient amount such that submission of form VAT652 (or a letter) is not required HMRC’s online guidance states under ‘What you can do next’ that ‘correcting errors by making an adjustment or correction in your next VAT return is the simplest way and most commonly used’.

The guidance confirms that the correction must be made online or by using VAT652 if correcting a deliberate error or if the taxpayer does not...