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Correcting a VAT error


A client of mine has handed me this quarter's paperwork and there are supplier invoices from Nov, Dec & Jan and a sales invoice from Jan which are all relative the previous quarter.  This means that these were not included in the last VAT return.  I intend to amend this quarter's return accordingly but do I have to disclose this to HMRC?  



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08th May 2012 07:36

Underpaid or overpaid?

If the error is less than £10,000, or 1% of box 6 figure (I think), then you can just do a correction on the next return.

If the VAT has been underpaid, rather than overpaid, it would be wise to do a disclosure as well, as this can prevent later penalties.

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08th May 2012 10:57

Thanks Shirley.  This was

Thanks Shirley.  This was what I made of the information from the HMRC site.  It just helps when some one else can confirm that you are thinking in the correct way (maybe!)

Just to confirm, it works out that my client has underpaid VAT of £64.80 so not much to be honest.  Do you think it is still worth making a disclosure even though the amount is so small?

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08th May 2012 11:15

I would!

I would submit a disclosure, and charge the client for the extra work after explaining why it is needed. You could always give the client the choice, after explaining what could happen, but I am a cautious person and I always wonder if you cut one corner will they expect you to cut another, and another, etc.

Additionally, extra fees (and explanations) will go a long way towards your client making sure you get all the sales data in future.

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08th May 2012 11:26

Many thanks! I am also of the cautious mind and completely agree.

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