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VAT error or not?

VAT error or not?

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client is on accrual accounting for VAT with VAT returns due on calendar quarters. a supplier invoice for £50,100 + VAT £10,020 was dated 30th June and not paid until late July. Can the input tax simply be claimed on the September VAT return or do we need to go through the Form 652 procedure to correct June Vat Return - in other words is this delay in claiming an error?

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By Paul Crowley
30th Nov 2021 16:00

Just claim now
Declaring Output VAT is compulsory and can therefore be late
Claiming Input VAT is an option but must be clauimed within 4 years or is lost

That statement may be out of date but those were the rules

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By nick farrow
30th Nov 2021 16:17

thanks Paul - the reason i asked is apparently HMRC take a v long time to process 652's

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Replying to nick farrow:
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By Paul Crowley
30th Nov 2021 16:52

Rare that any error I come across is big enough
And I would only worry if the error was too little VAT paid, not t'other way around

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Jason Croke
By Jason Croke
30th Nov 2021 17:05

Technically the error is more than £10k and should be declared on a VAT652, but I agree that HMRC are currently taking about 6-9 months to process.

If the client owed VAT then the 652 would be a great way to declare the error and then not have to actually pay anything for several months, but seeing as it is a refund, then put onto the next VAT return but be aware that it is not technically the correct thing to. HMRC only likely to discover this during a VAT inspection so just be careful if adding £10k onto the next return is going to make the return look odd compared to usual returns.

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Replying to Jason Croke:
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By nick farrow
30th Nov 2021 17:39

thanks Jason - to include in the next return seems like one of those victimless crimes!

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Replying to Jason Croke:
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By Paul Crowley
30th Nov 2021 21:02

Not convinced it is wrong
Invoice dated 30 June?
Were there not rules that permitted VAT quarters to be 13 weeks, so that the period could be to a date that fitted the nearest Sunday
I had been doing VAT on a takeaway on the weekly basis on that approach up to probably less than 2 years ago when they (at long long last) deregistered.

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