VAEC7190 - Error correction for VAT: Correction methods: Monetary limit examples
Example
Talulah makes quarterly VAT returns for prescribed accounting periods ending on 31 March, 30 June, 30 September, and 31 December. She makes a net error of £8,000 in her quarterly return for the period ended 30 June 2008.
Talulah discovers the error in November 2008, that is, the accounting period beginning 1 October 2008.
Talulah discovered the error in an accounting period that began on or after 1 July 2008. She can adjust her VAT account and include the net value of the adjustment in the VAT return for the period of discovery, if the net value of the errors does not exceed the greater of
- £10,000, or
- 1% of the box 6 figure required on the VAT return for the period of discovery, subject to an upper limit of £50,000.
She can either correct the error by