UK HMRC Replaces VAT652 Form for VAT Error Correction

HMRC has digitalised the VAT error correction process, replacing the traditional form VAT652 with an online system aimed at improving efficiency, accuracy, and compliance oversight. The new online form is now the standard route for notifying HMRC of VAT return errors, available through the Government Gateway. Agents have been able to use the system on behalf of clients since July 2025.

Understanding the Correction Thresholds in the UK

The method for correcting VAT errors depends on their size and materiality:

• Errors under £10,000, or between £10,000 and £50,000 (if less than 1% of total sales for the period), can be adjusted in the next VAT return.
• Larger errors, or those not eligible for adjustment in the next return, must be reported directly to HMRC using the new online system.

HMRC notes that correcting an error in a VAT return does not count as a formal notification for penalty reduction purposes if the error is later deemed careless.

This move forms part of HMRC’s wider Making Tax Digital (MTD) strategy to streamline reporting and reduce administrative delays.

Alternative Options for Digitally Exempt Businesses in the UK

Businesses that are exempt from Making Tax Digital (MTD) obligations may continue to notify HMRC of VAT errors in writing. These notifications can be sent either:

• By post: BT VAT, HMRC, BX9 1WR
• By email: inbox.btcnevaterrorcorrection@hmrc.gov.uk

Written submissions must include detailed information such as how the error arose, the VAT periods affected, whether the error concerns input or output tax, and the total amount of VAT to be adjusted. Agents can also submit on behalf of clients, though digital notification remains the preferred route.

Learn more about the error correction methods in the HMRC official VAT notice 700/45.