VAT652: telling HMRC about errors in VAT returns

Form VAT652 was the paper form businesses used to tell HMRC about errors in earlier VAT returns. HMRC says you can no longer correct VAT return errors using form VAT652. Today you either adjust your next VAT return, if the error is within the error correction thresholds, or report it to HMRC separately online or in writing.

What was form VAT652 used for?

VAT652 was a notification form for VAT registered businesses that found mistakes in returns they had already submitted. Errors can involve output tax or input tax, and the form was a way of telling HMRC about them separately rather than through a later return, for example where an error was too large to put right on the next return.

People still search for “VAT652” because accountants, older guidance and software help pages refer to it. The rules about when an error must be reported separately have not gone away. What has changed is the way you report it.

Can I still use form VAT652?

No. The gov.uk page for the form was updated on 8 September 2025 to say that you can no longer correct errors in your VAT returns using form VAT652. The same page now points you to three routes: updating your next VAT return, making the correction online, or sending the correction in writing.

If you find an old copy of the form in your files, do not send it. Use one of the current routes below. The underlying guidance is VAT Notice 700/45, which sets out two methods: method 1 (adjust your next return) and method 2 (tell HMRC separately). For a wider look at the process, see our guide to correcting VAT errors.

When can I correct a VAT error on my next return?

Under method 1 you add the net value of the errors to your current return. You work out the net value by totalling the extra tax due to HMRC, totalling the tax due to you, and taking the difference. You can use method 1 if the net value is:

• £10,000 or less, or
• between £10,000 and £50,000 and no more than 1% of the box 6 figure (net outputs) on the return for the period in which you discover the error.

The 1% test uses the return you are about to file, not the return where the mistake happened. If you owe more, the net value goes in box 1; if HMRC owes you, it goes in box 4. Our guide to VAT return boxes explains what each box holds, and the VAT100 return page covers the return itself.

When must I tell HMRC separately?

You must use method 2 and notify HMRC separately if:

• the net errors are between £10,000 and £50,000 and exceed 1% of box 6,
• the net errors exceed £50,000, or
• the errors on previous returns were made deliberately, whatever the amount.

You may also use method 2 for smaller errors if you prefer. One point catches people out: correcting an error under method 1 does not count as a disclosure for penalty purposes. If an error was careless and you want the maximum reduction in any penalty, HMRC says you should also tell it in writing about the error and your grounds for a reduction.

How do I tell HMRC about an error now?

HMRC asks you to report errors online where you can. Whether you report online or in writing, give:

• how each error arose,
• the VAT period in which it happened,
• whether it was an input tax or output tax error,
• the amounts overdeclared or underdeclared and how you calculated them,
• whether you paid an amount that was not due, and
• the total amount to be adjusted.

If you are claiming a refund, HMRC says it can only accept the claim if you give all of this information. If you cannot use the online service, write to the VAT Error Correction Team, BT VAT, HMRC, BX9 1WR, and include your VAT registration number. Keep your own record of the error too, including the date it was found and how it happened.

Key fact	Detail
Form code	VAT652 (no longer used for correcting errors)
Who it was for	VAT registered businesses reporting errors in past returns
How to report now	Adjust the next return (method 1), or notify HMRC online or in writing (method 2)
Method 1 limit	Net error up to £10,000, or up to £50,000 if within 1% of box 6
Must notify separately	Over £50,000, over the 1% test, or any deliberate error
Time limit	4 years, except deliberate errors
Penalty range	Up to 30% careless, 70% deliberate, 100% deliberate and concealed
Replaced by	Online reporting or a letter to the VAT Error Correction Team

How far back can I correct an error?

The time limit is 4 years. For underdeclared or overdeclared output tax and overclaimed input tax, it runs from the end of the accounting period in which the error happened. For input tax you failed to claim, it runs from the due date of the return for that period. The 4 year limit does not apply to deliberate errors. Our page on VAT assessment time limits covers how far back HMRC itself can go.

How does the 1% test work in practice?

Illustration only. A wholesaler files quarterly returns. In the current quarter it discovers that output tax was underdeclared by £18,000 on a return filed last year, and that input tax of £2,000 was missed on another. The net value is £16,000 due to HMRC.

The box 6 figure on the current return is £2,000,000, so 1% is £20,000. Because £16,000 is above £10,000 but below both £20,000 and £50,000, the business can add £16,000 to box 1 of the current return under method 1. If box 6 had been £1,200,000 instead, 1% would be £12,000, the error would exceed the test, and the business would have to notify HMRC separately rather than adjust the return.

Will I get a penalty or interest?

HMRC says penalties can apply to errors that are careless or deliberate, and late payment interest applies if an error meant you did not pay all the VAT due on time. It will not charge a penalty for an inaccuracy if you took reasonable care. Where a penalty applies, the maximum is 30% of the extra tax for a careless error, 70% for a deliberate one and 100% for deliberate and concealed behaviour. For a careless error that you disclose unprompted, the penalty can be reduced to 0%. See VAT inaccuracy penalties and HMRC late payment interest for more detail.

Once a return is filed HMRC can open a check into it, and the accountant’s fees for dealing with that check can be insured through tax investigation insurance.

Frequently asked questions

Is there a replacement form for VAT652?

There is no new numbered paper form. HMRC directs you to report errors online, or by letter to the VAT Error Correction Team if you cannot use the online service.

Can I net off errors in my favour against errors I owe?

Yes. The thresholds are tested against the net value, which is the extra tax you owe less the tax owed to you across the errors being corrected.

Do deliberate errors ever go on the next return?

No. HMRC says you must always use method 2 for errors made deliberately on previous returns, however small they are.

Which box 6 figure do I use for the 1% test?

Use the box 6 figure on the return for the period in which you discover the error, not the period in which the error was made.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

Sources

• GOV.UK: Vat notification of errors in vat returns vat 652
• GOV.UK: How to correct vat errors and make adjustments or claims vat notice 70
• GOV.UK: Correct errors in your vat return
• GOV.UK: Compliance checks for penalties of inaccuracies in returns or document

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 6 November 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.