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Reporting VAT errors greater than 4 years old?

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The HMRC guidance on reporting VAT errors states the following:

"4.6 The time limit for correcting errors

You cannot adjust your VAT Return, or make an error correction notification, for any errors that arose in accounting periods that are outside the time limits at paragraph 4.6.1 and paragraph 4.7. You may however be able to correct tax point errors, where you have declared an amount of VAT on the return that immediately precedes or follows the return for which the amount was due, provided the later return remains in time under the 4-year capping provisions."

On first reading, this sounds like they are not interested in VAT return errors that occurred more than 4 years ago, but I find that hard to believe especially if someone owes them money! I suspect I am interpreting it wrong, so I called the helpline to check, and was initially told that I can't report an error, but then they backtracked and said maybe, so I'm no further in my understanding.

For context, I've discovered that input VAT has been reclaimed on purchases with a supplier that go back to 2008 in my client's books, where they should have been reverse charge. As the value of the errors fall under the threshold for Method 1 reporting, I will simply make an adjustment in the next return for those that fall less than 4 years ago. However, there remains approx. £1500 of input VAT reclaimed for purchases between 2010 and 2015, which span 18 VAT returns which range from £30 to £150. 

I assume it would be prudent to assume that HMRC would be very interested indeed and complete form 652 or via letter. I've never had to make a declaration before but it looks like I'd have to complete it 18 times for each return where there was an error? Any advice would be gratefully appreciated, thank you. 

Replies (2)

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By Les Howard
25th Jan 2020 19:31

If the errors are more than four years old, and not fraudulent you cannot adjust them. So don’t. Don’t cause a problem where there isn’t one!

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Replying to leshoward:
By Tweetinat
25th Jan 2020 19:53

Thank you. As I've never dealt with an error before I wasn't sure, but this is great news if so. Will certainly make my life easier!

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