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Post Info TOPIC: VAT error


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VAT error


Hello everyone

My client who submits her own VAT return from the figures she's given has submitted the previous quarters figures (she's under a lot of stress at the moment but I still think 'why, oh why'!!) and paid HMRC £3K more than required.  I've never had to do an amendment and I'm going round in circles on HMRC's website for the best thing to do in this situation.  Should it just be the error correction form or is there another option when it's not errors in the accounting it's just totally the wrong figures!  Any advice would be much appreciated.

Knew I shouldn't have had a holiday no



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Janet

They keep making the system idiot proof but then make bigger and better idiots!



Master Book-keeper

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Hi Janet
Glad to see you are still lurking, in the nicest possible way.

Sounds like you need another holiday to recover from the mess you have had to pick up! Where did you get to? Whats a holiday? lol.

Anyway - you can correct an error via the next VAt return if it falls within certain perameters, or you can fill in a form - VAT652. There is an online version of the form, although it might be best having a look through the paper based version first to see what you need before you start the online one, albeit stuff is in a different order! You can actually talk to the error correction team if you need, although they wont allow correction over the phone. (Well normally you can talk to them, but they might all now be working on brexit along with the rest of HMRC). Links enclosed showing detail contact info:-

https://www.gov.uk/vat-corrections

online form
https://public-online.hmrc.gov.uk/lc/content/xfaforms/profiles/forms.html?contentRoot=repository:///Applications/Vat_iForms/1.0/VAT652&template=VAT652.xdp

bummer - whilst trying to find the actual 'form' I was going round in circles - seems HMRC have hidden it. But I have a copy here that might help (old one!)



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Senior Member

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I think the error is not big enough to be corrected between returns. I think the error has to be over 10K of vat for that.

www.gov.uk/vat-corrections

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Master Book-keeper

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He we differ John.

Must say though, I'm a bit mad at myself for including a bog standard gov.uk link in here, albeit it has a tiny word 'or' which explains my position.

There is also commentary in the relevant Vat guide, which says a bit more. But I thought it probably best to consider the manuals, so here goes on the relevant page www.gov.uk/hmrc-internal-manuals/vat-assessments-and-error-correction/vaec7120

Now in truth, my only worry would normally be with the 652 method would (could) be opening up the client to a penalty, albeit in this case it's a careless rather than deliberate error and indeed the public purse gained rather than lost out and they can put measures in place to prevent the same occurring again, blur blur blur. Erring on the side of caution perhaps just changing the next vat return is preferable, keeping documentation showing this was resolved the minute it was discovered (adjustments in the books, email berating said client....in the nicest way(!), plus this post shouldn't result in an issue if they have an inspection between now and the next return.

Of course the issue might be one of cashflow. That said, I wonder how long HMRC are currently taking on 652 turnarounds, bearing in mind the delays in other areas, eg R&D, currently being experienced.

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Senior Member

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Cheshire wrote:

Hi Janet
Glad to see you are still lurking, in the nicest possible way.

Sounds like you need another holiday to recover from the mess you have had to pick up! Where did you get to? Whats a holiday? lol.

Anyway - you can correct an error via the next VAt return if it falls within certain perameters, or you can fill in a form - VAT652. There is an online version of the form, although it might be best having a look through the paper based version first to see what you need before you start the online one, albeit stuff is in a different order! You can actually talk to the error correction team if you need, although they wont allow correction over the phone. (Well normally you can talk to them, but they might all now be working on brexit along with the rest of HMRC). Links enclosed showing detail contact info:-

https://www.gov.uk/vat-corrections

online form
https://public-online.hmrc.gov.uk/lc/content/xfaforms/profiles/forms.html?contentRoot=repository:///Applications/Vat_iForms/1.0/VAT652&template=VAT652.xdp

bummer - whilst trying to find the actual 'form' I was going round in circles - seems HMRC have hidden it. But I have a copy here that might help (old one!)


 Thanks Joanne 

It's the huge pile of work that the accountants keep adding to my desk (even while I was on holiday!) that makes me a lurker ;)

Holiday = hide in the middle of nowhere and drink lots of gin biggrin We were walking, chilling and generally just being away from it all in Derbyshire and Yorkshire - Masham had 2 brewery's and four pubs so we didn't do much walking that week!  Fabulous weather really topped it off. 

Thanks for the info.  I couldn't find the paper version either which was one of the things I found frustrating.  I wasn't keen to start the online form until I knew what it entailed.  I did try ringing today but I had limited time and didn't get an answer before some one was chasing me.

Hi John

I read it as if you fall within the thresholds you could leave it till the next return or submit VAT652.  Have I misunderstood that?



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Janet

They keep making the system idiot proof but then make bigger and better idiots!



Senior Member

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Cheshire wrote:

Now in truth, my only worry would normally be with the 652 method would (could) be opening up the client to a penalty, albeit in this case it's a careless rather than deliberate error and indeed the public purse gained rather than lost out and they can put measures in place to prevent the same occurring again, blur blur blur. Erring on the side of caution perhaps just changing the next vat return is preferable, keeping documentation showing this was resolved the minute it was discovered (adjustments in the books, email berating said client....in the nicest way(!), plus this post shouldn't result in an issue if they have an inspection between now and the next return.

Of course the issue might be one of cashflow. That said, I wonder how long HMRC are currently taking on 652 turnarounds, bearing in mind the delays in other areas, eg R&D, currently being experienced.


 I was concerned about a penatly having read the bit about carelessness.

Cashflow isn't an issue so possibly best to leave it until the next return.

Thank you



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Janet

They keep making the system idiot proof but then make bigger and better idiots!



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Date:

Cheshire wrote:

He we differ John.

Looking at

https://www.gov.uk/hmrc-internal-manuals/vat-assessments-and-error-correction/vaec7120

I accept that you are right in that there is a procedure where small errors can be corrected by letter or 652, but HMRC generally discourage that and seem to prefer an adjustment in the next return.

I have had direct discussions with HMRC about this.  Although none of my clients has submitted the wrong vat amount when the pilot scheme was running there were facilities for manual adjustments needed as a result of software errors and bedding in.

In the end the key question is whether it is possible to get the 3K back before the next vat quarter.  I have no experience of 652 submissions.

 

 



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Master Book-keeper

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johnhemming wrote:
Cheshire wrote:

He we differ John.

 

I accept that you are right in that there is a procedure where small errors can be corrected by letter or 652, but HMRC generally discourage that and seem to prefer an adjustment in the next return.

 

In the end the key question is whether it is possible to get the 3K back before the next vat quarter.  I have no experience of 652 submissions.

 

 


Generally HMRC discourage any kind of forms, but bizzarely with this one despite adding a ton more boxes to the online version (which is now more onerous) they still say you can just write a letter to the corrections team. Long live sensible suggestions.  Although then as we know it can go into snail mail mode, which at HMRC is slower snail mail than most places.

Technically you should get a refund within a week - 21 days.  But as I said in these times of moving staff from dealing with the core services to the new/who has a clue type stuff the timescales may well be stretched.  Its not an area Ive heard of delays in, but Ive not seen our resident expert, Les, around for a while, so not had any specific updates.  

 



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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Kinbuck wrote:


 Thanks Joanne 

It's the huge pile of work that the accountants keep adding to my desk (even while I was on holiday!) that makes me a lurker ;)

Holiday = hide in the middle of nowhere and drink lots of gin biggrin We were walking, chilling and generally just being away from it all in Derbyshire and Yorkshire - Masham had 2 brewery's and four pubs so we didn't do much walking that week!  Fabulous weather really topped it off. 

Thanks for the info.  I couldn't find the paper version either which was one of the things I found frustrating.  I wasn't keen to start the online form until I knew what it entailed.  I did try ringing today but I had limited time and didn't get an answer before some one was chasing me.

Hi John

I read it as if you fall within the thresholds you could leave it till the next return or submit VAT652.  Have I misunderstood that?


 Hi Janet

Well its good you are keeping busy - in some ways at least!  

Glad you enjoyed your gin......and your  hols. They are two of the nicest counties in the UK and superb when you get the right weather.

I did some more digging re the paper version - you can still get a copy but you have to phone them, so they are encouraging you to use the longer online version, which now needs the completion of all 9 boxes fro each one that is wrong as well as a few other bits that are not on the paper form, but as i said above to John you can still just write a letter.   But sounds like you have a plan anyway so its all good!

See you soon, hopefully!



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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Kinbuck wrote:

Masham had 2 brewery's and four pubs so we didn't do much walking that week!  Fabulous weather really topped it off. 


Lovely place. 20 miles up the road from where I live, and right on the edge of the Yorkshire Dales.



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Master Book-keeper

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Leger wrote:
Kinbuck wrote:

Masham had 2 brewery's and four pubs so we didn't do much walking that week!  Fabulous weather really topped it off. 


Lovely place. 20 miles up the road from where I live, and right on the edge of the Yorkshire Dales.


 

I cant recall going to this village, but I mustve! Maybe it was all the pubs!   Ive stayed just up the road in Middleham a couple of times and spent a fair amount of time in that part of the Dales.



__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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Cheshire wrote:
 Ive stayed just up the road in Middleham a couple of times and spent a fair amount of time in that part of the Dales.

 Have you been to The Forbidden Corner?  Got a day trip pencilled in for August with Mrs R, a friend and her kids.  It looks quite good from what I've read.



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Senior Member

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Date:

Leger wrote:
Kinbuck wrote:

Masham had 2 brewery's and four pubs so we didn't do much walking that week!  Fabulous weather really topped it off. 


Lovely place. 20 miles up the road from where I live, and right on the edge of the Yorkshire Dales.


 I could have called in for a cuppa John biggrin  Fabulous area and I think if we were to leave Scotland I would move to that area.

The Forbidden Corner looks great, would have liked to go but I was going back to places I went 37 years ago on a geography trip.  White scar caves are twice the size they were in 1982!!

Thanks for all of the info Joanne and John, I appreciate the support.  Meeting with the client to discuss how they want to handle it next week.  Also a possibility that de-registration is on the cards.

Cheers...it's nearly Friday smile



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Janet

They keep making the system idiot proof but then make bigger and better idiots!



Master Book-keeper

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Posts: 8646
Date:

Leger wrote:
Cheshire wrote:
 Ive stayed just up the road in Middleham a couple of times and spent a fair amount of time in that part of the Dales.

 Have you been to The Forbidden Corner?  Got a day trip pencilled in for August with Mrs R, a friend and her kids.  It looks quite good from what I've read.


 Hi John

Never heard of that one, not sure it was in existence when I went to Middleham as my boy was quite young then (or maybe I was just drunk or asleep all the time!)   Looks worth a visit through.  Let us know how you get on.  I should head that way for a day instead of my usual Anglesey day out!



__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position

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