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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a client who has been charging (by mistake) 5% VAT instead

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I have a client who has been charging (by mistake) 5% VAT instead of 20% on a number of invoices (20) going back just over 4 years. This was purely a mistake as it was to do with vat on insulation and he got confused. The amount of net sales are about £150,000 so the vat owed is about £22,500. My question is can he amend his next vat return up to £10,000 then declare the balance on VAT 652 or does he have to do the whol amount on the VAT 652?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.You have a choice ..you can complete Form 652 disclosing total error or write to VAT Office advising them of the error.More information can be found herehttps://www.gov.uk/vat-corrections/report-error I hope this is helpful and answers your question. If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
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Customer: replied 1 year ago.

Sorry, so are you saying we can amend his next VAT Return up to the £10,000 and then do the 652 for the balance or not? Thanks

Expert:  taxadvisor.uk replied 1 year ago.
Dave, thank you for your reply.

You can adjust your next VAT Return if the net value of the errors is £10,000 or else.
Your total is around £22,500. It is above the reporting threshold.
You should report the whole amount on Form 652.

More information on this can also be found here

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


I hope this is helpful and answers your question.

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