HMRC Guidelines: Manual Adjustments for VAT Compliance and Error Correction

• HMRC issued Guidelines for VAT Compliance to help eliminate VAT reporting errors
• Manual adjustments are necessary for partial exemption, capital goods scheme, bad debt adjustments, import VAT accounting, and margin schemes
• Adjustments must be kept digitally, but details of the calculation can be kept for audit trail purposes
• Controls for partial exemption and capital goods scheme include version control, access restrictions, documentation, sense checking, and adherence to rounding rules
• Controls for import VAT include including import VAT in the correct accounting period, using separate tax codes, retaining statements and certificates, and including net value in box 7 of the VAT Return
• Error corrections for VAT under £10,000 or between £10,000 and £50,000 but less than 1% of total sales can be included on the VAT return
• Document errors with an explanatory note and ensure adjustments are done correctly

Source: saffery.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---