HMRC has digitalised its VAT error correction process, withdrawing the traditional form VAT652 in favour of an online system designed to improve efficiency and accuracy. 

Understanding the correction thresholds 

The method for correcting VAT errors depends on their size and nature. Errors can be adjusted in the next VAT return if the net value is less than £10,000, or between £10,000 and £50,000 and represents less than 1% of total sales in the correction period. Errors exceeding these thresholds, or those otherwise ineligible for adjustment in the next return, must be reported directly to HMRC. 

Correcting an error in your VAT return does not count as notifying HMRC for the purposes of reducing penalties in the event HMRC consider the error to be careless. 

The digital process 

Businesses can correct errors online using their Government Gateway credentials. Since July 2025, agents can also submit corrections on behalf of clients through the same system. 

The online form is accessible via the Check how to tell HMRC about VAT Return errors tool. 

Alternative options for digitally exempt businesses

Businesses exempt from MTD VAT may continue to notify HMRC about errors in their VAT returns in writing. Written notifications should be sent to the VAT error correction team either by post at BT VAT, HMRC, BX9 1WR, or by email at inbox.btcnevaterrorcorrection@hmrc.gov.uk.

The following information should be included in any notification in writing:

• how each error arose;
• the VAT accounting period in which it occurred;
• if it was an input tax or output tax error;
• the VAT underdeclared or overdeclared in each VAT period;
• how the VAT underdeclared or overdeclared was worked out;
• whether any of the errors resulted in paying HMRC an amount that was not due; and
• the total amount to be adjusted.

While agents can currently write on behalf of clients to HMRC using the same contact details to correct errors, the online route is recommended wherever possible.

Further guidance

• VAT Notice 700/45 includes more information on how to correct errors on a VAT return that has already been submitted and on penalties for errors.