I have a small consultancy which is registered for the VAT FRS. I mistakenly reported VAT payable based on the net rather than gross sales (hence my username) from Aug 2013 until now. I recognise that I have to pay the unpaid VAT, interest and a penalty (I know they will classify my mistake as careless). Since I therefore kept more of the VAT than I should have this increased my net profit on which I paid CT. I know that I can't offset the VAT, interest and penalty in this years accounts but should I go back and amend the previous two years accounts to show the slightly lower net profit. Total VAT unpaid is around £5k across 9 quarters.
Thanks for any advice on this.