CH81142 - Penalties for Inaccuracies: Types of inaccuracy: Correction of errors for indirect taxes – monetary limits

You must check the date from which these rules apply for the tax or duty you aredealing with. SeeCH81011for full details.

The indirect tax error correction limits, below which errors can be adjusted in the return for the period of discovery, are as follows. These limits apply to errors discovered in accounting periods beginning on or after 1 July 2008.

Value Added Tax (VAT)

The net value of the error must not exceed the greater of

• £10,000, or
• 1% of the box 6 figure on the VAT return for the period of discovery, subject to an upper limit of £50,000.

Insurance Premium Tax (IPT)

The value of the errors must not exceed the greater of

• £10,000, or
• 1% of the box 10 figure on the IPT return for the period of discovery, subject to an upper limit of £50,000.

Air Passenger Duty (APD)

The value of the errors must not exceed the greater of

• £10,000, or
• 1% of APD (before adjustment for previous errors) due on the APD return for the period of discovery, subject to an upper limit of £50,000.

Landfill Tax, Climate Change Levy and Aggregates Levy

Where the person is registered for VAT, the value of the errors must not exceed the greater of

• £10,000, or
• 1% of the box 6 figure on the VAT return for the period of discovery, subject to an upper limit of £50,000.

If the person is not liable to be registered for VAT there is a single limit of £10,000.