HMRC has digitalized its VAT error correction process, replacing form VAT652 with an online system for improved efficiency. Errors under £10,000 or between £10,000 and £50,000 (less than 1% of total sales) can be adjusted in VAT returns. Exceeding thresholds must be reported directly to HMRC. Businesses use Government Gateway credentials for online corrections, while VAT-exempt businesses may noti... Read more

In certain situations, customers must account for VAT due, such as purchasing services from overseas suppliers, deregistering goods with claimed input tax, applying the domestic reverse charge (DRC), and supplying mobile phones/computer chips. Failure to do so can result in HMRC penalties and interest. Simple accounting entries can resolve these issues, but accurate recording is crucial for avoidi... Read more

VAT is a UK tax on goods and services, with rates ranging from 20% to 0%. Businesses must register if their taxable turnover exceeds £90,000 in the past 12 months, acquire a VAT-registered business as a going concern, or purchase goods or services VAT-free from non-UK countries. Exceptions include unregistered supplies, zero-rated supplies, and exempt supplies. Businesses must maintain accurate VA... Read more

On 29 September 2025, UK Chancellor Rachel Reeves reaffirmed no increase to the standard 20% VAT rate, per the 2024 election manifesto. However, the 26 November 2025 budget may raise funds by adjusting zero-rated or 5% VAT rates, potentially cutting the £90,000 VAT registration threshold, reducing domestic fuel VAT from 5% to 0%, or imposing VAT on private taxi/ride-sharing platforms. VAT Exemptio... Read more

This notice outlines how to correct VAT record errors, amend submitted VAT Returns, and claim refunds for overpaid VAT, underclaimed credits, or disputes with HMRC's VAT decisions. Prompt correction prevents penalties and interest. Correcting VAT records immediately, amending invoices, and correcting submitted VAT returns are crucial steps. Penalties apply for careless or deliberate errors, and the process involves reporting errors online or contacting HMRC. Refunds for overpaid VAT, incorrectly charged VAT, and under-claimed input tax can be claimed within 4 years. Reimbursement schemes are available for those who claim refunds but bear VAT costs. Read more

The new Exchequer Secretary to the Treasury, MP, will oversee tax system and administration policy. HMRC updated advisory fuel rates, warned of self-assessment scams, and updated MTD guidance. New Exchequer Secretary to the Treasury An MP (Member of Parliament) is appointed Exchequer Secretary to the Treasury (XST), replacing the last MP, who is now Chief Secretary to the Treasury. The XST overse... Read more