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.