This is general information, not tax or legal advice. Rules and rates change, so check GOV.UK or ask an accountant.
If you find a mistake on a VAT return you have already filed, do not ignore it. HMRC has set routes for correcting errors, and the right one depends on the size of the error. Always check GOV.UK on VAT corrections for the current limits.
Step 1: find out what went wrong
- Did you use the wrong tax rate?
- Did you miss an invoice, or enter one twice?
- Did you claim VAT without a valid invoice?
- Was it a mistake in the period, or a timing difference?
Step 2: work out the net error
Add up the errors in the VAT you owe and the VAT you reclaimed, to get the net error across the periods affected.
Step 3: choose the route
- Small errors: GOV.UK sets a threshold, currently the lower of a fixed amount or a percentage of your turnover for the period. If the net error is under the threshold, you can usually correct it on your next VAT return and keep a record of it.
- Larger errors: report them to HMRC separately, using the process on GOV.UK, and do not wait for the next return.
- Deliberate errors: these cannot use the simple route and may attract penalties.
Thresholds change, so check GOV.UK before choosing.
Step 4: keep a record
Record what the error was, when you found it, how you worked out the amount, and how you corrected it. Keep the evidence with your VAT records.
How to avoid repeats
- Check tax rates on each line. See the nine VAT boxes.
- Reconcile the bank before you file. See the VAT return checklist.
- Lock the period after filing so entries are not changed. See lock dates.
- Review unusual items before submitting.
How AvrioBooks helps
Run the VAT report to see what is in each box and review the entries behind it. VAT returns and Making Tax Digital for VAT are on the Standard plan and above. Ask your accountant how to treat a particular correction. See VAT software.
Frequently asked questions
Can I correct a VAT error on my next return?
Small errors under the HMRC threshold can usually be corrected on the next return, with a record. Check GOV.UK for the current limit.
What if the error is large?
Report it to HMRC separately using the process on GOV.UK, rather than waiting for the next return.
What records should I keep?
What the error was, when you found it, how you worked out the amount and how you corrected it.
How do I stop it happening again?
Check tax rates, reconcile before filing, review unusual items and lock the period after you file.
Keep reading
Director's loan account explained: what to record and the tax traps
Money moving between you and your company goes through the director's loan account. Here is how to keep it clean.
3 November 2026 · 6 min read
Dividends vs salary for small company directors: how to record both
Salary and dividends are taxed differently and need different records. Here is how to record both properly.
3 November 2026 · 6 min read
Budget 2026: what it means for small businesses and the self-employed
The Budget has landed. Here are the main points reported for small firms and the self-employed, and what to check.
3 November 2026 · 6 min read