If the total value of errors is £250 or less
If the total value of any tax errors on a previous quarterly GST return is £250 or less (£83 for a monthly return), it can be corrected on your current GST return. You can adjust your current GST return with the corrected amount.
If the error means that you owe more GST than you had calculated, add it to your output tax, in box 6. You will not have to pay any penalties or interest on the adjustment.
If the error means that you owe less GST than you had calculated in your return (ie we owe you a refund of GST), include the amount in your input tax in box 7.
Let our officers know the next time we visit your business. The officers will check the adjustment and ensure that it is correct.
Will I have to pay penalties?
If the total value of any tax errors on a previous quarterly GST return is £250 or less, we won't impose any penalties.
If the total value of errors is more than £250
If the total value of errors on a GST return is more than £250, you must not make an adjustment to your GST return. You must write to us, setting out:
- the value of the errors
- which GST return(s) they relate to
- if it was an input tax or output tax error
- your incorrect GST calculation
- a brief explanation of how each error was made
Head your letter: 'Voluntary disclosure of GST return errors'.
If you have corrected errors of more than £250 on a GST return, we may visit your business.
Claiming money from the Taxes Office
If the errors mean that you are claiming money from the Taxes Office, the amount due will be paid within 30 days of the claim having been received. This period may be extended by the time it takes to make any reasonable enquiries into the claim, and the amount may be amended if found not to be correct.
We will not repay the claim where the error was:
- charging GST to customers in error, and
- the customers paid the GST charged, and
- you cannot refund the GST to those customers
Will I have to pay penalties?
If you tell us about an error of over £250 tax before we start making enquiries into your GST affairs, we won't impose financial penalties.
Enquiries begin from the date we contact you to arrange a visit to your business - so you must tell us no later than this of errors or omissions in your previous GST returns.
Adjustments that don't count as errors
Adjustments that you make as part of your normal GST accounting are not errors.
- an approved estimation procedure
- partial exemption annual adjustments
- claiming input tax later than the period it was incurred in because the invoice was issued late or you received a credit / debit note
- claims for bad debt relief
Bad debts and your GST return
Errors to watch out for
The examples below show some of the common errors made when completing a GST return.
Sales that may be missed:
- sales to your staff, for example:
- canteen meals,
- goods at reduced prices,
- sales from vending machines,
- payments from staff for use of cars and telephones
- sales of business assets or capital equipment, for example office equipment or vehicles
- deemed supplies of fuel and motor vehicles for private motoring (benefits in kind)
- gifts of goods that cost you more than £10 (excluding GST)
- goods for your own use - that you or your family takes out of the business
- the full value of goods sold where you’ve taken something in part exchange
- commission received in return for selling something on behalf of someone else
- self-billed invoices received
Purchases and expenses:
- claiming input tax where you don’t have a proper GST invoice (letters, bills, receipts, order forms, statements, and proforma invoices are not GST invoices)
- GST claimed on a purchase from a supplier that is not GST-registered
- GST claimed as input tax on purchases or expenditure for purely private or personal use, for example private telephone calls
- GST claimed on a second-hand vehicle that you’ve bought under the GST margin scheme
- where you issue self-billed invoices and your supplier isn’t registered for GST
Remember to include your GST number when disclosing errors.