How to Correct VAT Return Errors: HMRC Rules, Methods, and Time Limits

Errors in VAT returns can happen, but it’s important to correct them properly and on time. HMRC has updated the process, and businesses now need to follow specific methods when fixing VAT mistakes.

Previously, errors could be reported using form VAT652. However, this form was withdrawn from 5 September 2025, and it is no longer accepted. If a mistake is found in a VAT return, it must now be corrected using one of the approved methods explained below.

Ways to Correct a VAT Error

If an error has been identified, it can be corrected in one of the following ways:

• Adjusting the next VAT return

• Reporting the error online

• Notifying HMRC in writing

The correct method depends on the value of the error and how it occurred.

Correcting Errors in the Next VAT Return

You can amend your next VAT return if:

• The error is £10,000 or less, or

• The error is between £10,000 and £50,000 and does not exceed 1% of box 6 (net outputs) in the return for the period when the error was discovered

This option is only available if the error was made carelessly, not deliberately.

The net value of the error is calculated as the difference between:

• The extra VAT owed to HMRC, and

• Any additional refund due from HMRC

Reporting VAT Errors Online

Errors must be reported directly to HMRC instead of being adjusted in the next return if:

• The value exceeds £50,000, or

• The error is between £10,000 and £50,000 and is more than 1% of box 6, or

• The error was made deliberately

In most cases, this should be done using HMRC’s online disclosure service via the Government Gateway account.

Information Required When Reporting Online

When submitting the correction online, you must provide:

• An explanation of how each error occurred

• The VAT accounting period affected

• Whether the error relates to input tax or output tax

• The amount of VAT under-declared or over-declared for each period

• Details of how the VAT difference was calculated

• Confirmation of whether HMRC received any payment that was not due

• The total value of the adjustment

Refund claims will only be accepted if all required information is included.

Notifying HMRC in Writing

If you are unable to use the online service, errors that cannot be corrected in the next VAT return must be reported by post.

Your letter should include:

• Your VAT registration number

• All the details listed above for online disclosures

The letter should be sent to:

BT VAT
HMRC
BX9 1WR

Time Limits for VAT Error Corrections

Although errors should be corrected as soon as possible, HMRC applies specific time limits.

• For output tax errors or over-claimed input tax, corrections must be made within four years from the end of the VAT period in which the error occurred.

• For under-claimed input tax, the time limit is four years from the due date of the VAT return for that period.

There is no time limit for correcting deliberate errors.

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