Bugger messed up VAT return - question....

[whojamaflip]

Just realised I've over-claimed on our last VAT return - sorting it out now to pay it back but am a bit concerned its gonna land the wrath of HMRC on my neck.

Basic details - over claimed £3000 through thinking we could claim for development of a barn on the farm but thanks to the LA who put restrictions on the Planning it doesn't count as diversification so can't claim VAT for any of the work.

Will be paying it back tomorrow (just tearing my hair out doing the return at mo) but was wondering where we will stand re penalties and VAT inspection.

Anyone?

can't you do the adjustment on the next VAT return? No expeert but just a suggestion

Thats what I'm planning to do - just really concerned that its going to flag up and that we will be penalised - usually we have a repayment from them - this time it means we will be paying them so will be unusual activity on the account iyswim. likes to keep head down and hope HMRC ignores us

Don't understand - if it isn't diversification then presumably it comes under your farming activities against which you can claim all VAT?

The problem is that the barn development was put under the condition of planning to be ancillery accomodation only and so it didn't come under the remit of being able to claim VAT......at least thats what out accountants have told us. (May have to double check that)

Tbh I'm not concerned about paying the money back more that we are going to have a major VAT inspection and a fine.

Thanks for your replies.

Speak to your accountant who knows all the facts and will be able to give you proper advice. But in general, HMRC do not expect you to be clairvoyant so unless the mistake was careless or deliberate you should not receive a penalty. There is a procedure to follow though.