A: If a net VAT error exceeds £10k due to or from HMRC then an Error Notification is necessary UNLESS it is below 1% of the next VAT return’s box 6 figure which would be £15k . As this is higher than the £12k VAT error , there will be no need to complete an error notification and the error can be amended on the next VAT return in HMRC’s favour. This is covered in chapter 4 of VAT Notice 700/45.
However, to notify HMRC of this error for penalty mitigation purposes, it would still be necessary and is advisable to inform them of the error by letter or VAT 652 form (but ensure the box is ticked to say the error has / is being corrected on the VAT return).
These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.
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