VAEC8050 | Error correction for VAT returns: Processing: Under-declarations and repayment supplement

The procedural guidance in this manual only covers the VAT Mainframe and VISION processes. For guidance on the Making Tax Digital and ETMP processes for fully migrated customers, see VAEC0200 and the Making Tax Digital for VAT compliance toolkit.

Where an error notification includes over clams of input tax, or under declarations of out put tax, which relate to a period that attracted repayment supplement, a related proportion of the repayment supplement may also be recoverable where this exceeds the £50 de minimus level.

In this situation the correct procedure is as follows

Where repayment supplement (RS) has been paid (RS details appear on the Trader Report D1600 series) and an under-declaration is subsequently raised on the period, a default surcharge action print (DSAP) is automatically produced and forwarded to the Repayment Supplement Team Electronic Folder (EF) in-tray.

They will then calculate if the RS has been overpaid and initiate recovery or amendment action as necessary.

New VAT late submission and payment penalties will apply for VAT periods starting on or after 1 January 2023, please refer to guidance at CH192000 and CH193000 for details.