PART VACCOUNTING, PAYMENT AND RECORDS

Correction of errors34

1

This regulation applies where a taxable person has made a return, or returns, to the Controller which overstated or understated his liability to VAT or his entitlement to a payment under section 25(3) of the Act.

2

In this regulation—

a

“under-declarations of liability” means the aggregate of—

i

the amount (if any) by which credit for input tax was overstated in any return, and

ii

the amount (if any) by which output tax was understated in any return;

b

“over-declarations of liability” means the aggregate of—

i

the amount (if any) by which credit for input tax was understated in any return, and

ii

the amount (if any) by which output tax was overstated in any return.

3

Where, in relation to all such overstatements or understatements discovered by the taxable person during a prescribed accounting period, the difference between—

a

under-declarations of liability, and

b

over-declarations of liability,

does not exceed £2,000, the taxable person may correct his VAT account in accordance with this regulation.

4

In the VAT payable portion—

a

where the amount of any overstatements of output tax is greater than the amount of any understatements of output tax a negative entry shall be made for the amount of the excess; or

b

where the amount of any understatements of output tax is greater than the amount of any overstatements of output tax a positive entry shall be made for the amount of the excess.

5

In the VAT allowable portion—

a

where the amount of any overstatements of credit for input tax is greater than the amount of any understatements of credit for input tax a negative entry shall be made for the amount of the excess; or

b

where the amount of any understatements of credit for input tax is greater than the amount of any overstatements of credit for input tax a positive entry shall be made for the amount of the excess.

6

Every entry required by this regulation shall—

a

be made in that part of the VAT account which relates to the prescribed accounting period in which the overstatements or understatements in any earlier returns were discovered,

b

make reference to the returns to which it applies, and

c

make reference to any documentation relating to the overstatements or understatements.

7

Where the conditions referred to in paragraph (3) above do not apply, the VAT account may not be corrected by virtue of this regulation.