Andrew Needham looks at the consequences of showing the wrong amount of VAT on an invoice.
It goes without saying that businesses should always show the correct amount of VAT on their sales invoices; but mistakes sometimes happen. The VAT amount can be wrongly calculated by a mathematical error, or the wrong VAT liability can be applied (e.g. a zero-rated supply is treated as standard-rated, or a standard-rated supply treated as subject to the lower rate).
Wrong amount of VAT charged
If a business shows the wrong amount of VAT on an invoice, it is responsible for accounting for the higher of the amount actually due or the amount shown on the invoice.
Here are some examples of common errors that business can make and how much VAT HMRC expects a business to account for.