HMRC online check – should you report your VAT Error?
In the continuing trend to introduce digital methods to HMRC’s VAT management a new online “tool” has been launched by HMRC to “help” VAT registered bodies work out whether they need to report a VAT error they have made on their VAT return or through the VAT 652 separate notification process.
At Centurion – Xeinadin’s Indirect Tax team – we are keen that clients ensure they reduce their exposure to unexpected VAT errors arising in the first place but life, and the complexities of VAT management, being what they are we recognise that VAT errors will arise and it’s important to be in control of the process of finding and managing their disclosure.
Finding and notifying VAT errors in a positive way to HMRC can reduce the risk of exposure to additional VAT penalties which typically can be 30% of the error. Not an insignificant cost to try to mitigate.
Being proactive in checking how effective your VAT management processes is easy to say but less easy to do in organisations struggling in difficult economic times. To help deliver good compliance in this regard and manage review costs we’ve developed our VAT Risk Evaluation Tool (VRET).
VRET helps VAT registered organisation get a better sense of any gaps in their VAT management processes which could be the trigger to the risk of VAT errors arising. It’s not just a tick box exercise but enables direct input from our VAT expert team – in a managed way – to produce a factual Risk Report which clearly demonstrates you’ve taken that, all important, level of “reasonable care” which is an action that could help reduce that threat of a financial penalty from 30% to nil.
In that way – hopefully – you’ll never need to use this new link above to work out how to notify HMRC of any VAT errors – you’ll be in control and have peace of mind that your VAT processes are working with and not against you.
The llnk you might wish to use therefore is email@example.com to get in touch and find out more about VRET.
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