Where
an adjustment is less than either £10,000 or 1% of the
quarterly turnover (subject to a maximum of £50,000), then it
can be adjusted on a VAT Return. Adjustments larger than that
will still require a separate written notification to HMRC on
a VAT 652.
HMRC
figures suggest that this will reduce the number of
notifications by around 70%.
A
taxpayer will be entitled to submit an adjustment under the
threshold. This may be helpful if there is a delay before the
next VAT Return is due.
It
should be noted that new penalty rules will relate to VAT 652
forms as well as to VAT Returns. Therefore, if there are
errors in the adjustment amount, then the taxpayer will be
subject to a penalty. The taxpayer should make sure any
adjustment he makes is correct in principle, and accurate
arithmetically.
For
the sake of completeness, similar new rules apply to
other Indirect Taxes, such as Insurance Premium Tax, Airport
Passenger Duty, Landfill
Tax, Aggregates Levy, Climate Change Levy. Fewer businesses
are registered for these taxes.
So
