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VAT: Default interest and net errors of less than ?2,000 |
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HMRC have confirmed details of their new practice regarding voluntary disclosure of errors on VAT returns from 1 September 2008. The current practice, described in paragraph 2.4 of Notice 700/43 (Default Interest) and note 4 on form VAT 652, of not charging default interest on net errors of £2,000 or less separately notified to HMRC, will continue until the end of August 2008. However, following the decision in Wilkinson v Commissioners of Inland Revenue, this practice is not considered lawful and will be withdrawn with effect from 1 September 2008. This means therefore, that all error notifications (previously known as voluntary disclosures) requiring an assessment may be subject to a default interest charge, irrespective of the amount involved. However as before, de minimis net errors can continue to be corrected on a VAT return and will not attract interest. Link |
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About The Author  Sarah Laing Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences). Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession. |
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Article Added Monday, 04 August 2008 |
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