How to correct your Salon’s VAT return

If you discover that one of your VAT returns needs to be corrected, we look at how to do this; and if you can expect any fines.

Time limits

The time limit to correct a VAT return is 4 years from the end of the VAT accounting period which it covers.

Having said that, you should sort it out as early as possible to minimise the risks of penalties and interest.

Deliberate errors

If the error was deliberate, you must notify HMRC in writing or using Form VAT652.

Errors under £10,000

If the net error is less than £10,000, you can simply adjust it through your next VAT return.

However, this does not constitute a “notification of the error” to HMRC and so does not necessarily avoid penalties. If the error was as a result of careless behaviour, HMRC are still entitled to charge penalties in the event that they discover it at a later date, even if it has already been adjusted on your next VAT return.

HMRC advise that including the adjustment on the return does not constitute a disclosure. This means that without also completing a VAT652 Form or notifying HMRC in writing, unprompted penalties could still be charged.

HMRC (as you would expect) advise that all amendments should be notified to them to gain the maximum reduction of any penalty for careless errors.

Errors over £10,000

Contact us for advice!

Adjustments which are not errors

Some adjustments are not errors, and these include:

  • Bad debt relief claims
  • Credit notes
  • Pre-registration or post-registration VAT reclaims
  • Capital Goods Scheme adjustments.

It is only if the original adjustment under these schemes was incorrect that you would complete an error notification.

Where to send the correction notifications

The notifications should be made in writing, or using the VAT652 Form. They should be sent to:

HM Revenue & Customs
VAT Error Correction Team – SO864
NE98 1ZZ

Salonfrog’s VAT service

Mistakes happen. That’s life. And for Clients who have our VAT service, we take care of all this for you so you can get on with what you do best!


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