I have recently taken over as Head of Finance for a professional partnership.
They have incorrectly adjusted their Inputs figure for Box 7,although they have correctly stated the input VAT claimed. Obviously, this is no loss to Customs but raises doubt in their mind, presumably about the records generally.
Who can tell me if there are any penalties likely as a result of this error in reporting?
Replies (2)
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In 25 years I have never heard of anyone getting into trouble for errors to the box 7 figure. It would lead to query if vat claimed did not gross up to the box 7. Box 6 is more critical as HMRC like to reconcile turnover back to the financial statements . Many bookkeepers make errors on the box 7 as they include exempt items like insurance etc but I have never heard of it leading to a problem.
Exempt purchases (such as insurance) go into box 7 it is outside of the scope transactions such as dividends and insurance claims which do not