Submitting an incorrect VAT return can result in penalties and interest, depending on why the mistake occurred and whether it was corrected promptly.

1️⃣ Accidental Errors (Careless Mistakes) ❌

If your VAT return contains an error due to a genuine mistake or carelessness, HMRC may charge a penalty if the error results in an underpayment of VAT or an overclaimed repayment.

The amount of the penalty depends on:

• whether the error was careless, deliberate, or deliberate and concealed;
• whether you told HMRC about the error before they discovered it; and
• how much assistance you provided during the investigation.

💡 Good to know:
If you took reasonable care when preparing your VAT return, HMRC may decide not to charge a penalty.

2️⃣ Deliberate Errors 🚨

If HMRC determines that incorrect information was provided deliberately, penalties can be significantly higher.

Examples include:

• intentionally omitting sales;
• knowingly claiming VAT that is not recoverable; or
• deliberately providing false information to reduce your VAT liability.

Penalties are based on the behaviour involved and can be substantially higher than those for genuine mistakes.

3️⃣ Interest on Underpaid VAT 💷

If additional VAT is due because of an incorrect return, late payment interest may also be charged on the outstanding amount until it is paid in full.

Interest is charged separately from any penalty.

💡 Correcting Errors

If you discover a mistake after submitting your VAT return, you should correct it as soon as possible.

Promptly disclosing an error and cooperating with HMRC can help reduce or, in some cases, eliminate any penalty.

Need Help?

If you've identified an error in a previously submitted VAT return and are unsure how to correct it, the hellotax team can guide you through the available options and help ensure the necessary corrections are made correctly.