Value added tax

What if I submit an incorrect return?

If you find that you have made an error on a previous return, the VAT office should be notified by way of a 'voluntary disclosure'. Errors up to £2,000 can simply be corrected on the next return; errors greater than this should be notified in writing to the VAT office. If you owe them money, then this should accompany the disclosure. Interest is payable on arrears.

If you experience financial difficulties, it can be tempting to hold on to cash that you should be paying to Customs and Excise. Given their powers to seize goods, this is not sensible. Instead, you should talk to the VAT office at an early stage about ways of spreading the payments.