Incorrect accounts ' the tax implications
What happens when an adviser becomes aware that accounts submitted for tax purposes contain an inaccuracy? Rebecca Benneyworth looks at the chain of logic applying to the corrections of accounts, and the implications for tax returns.
A client has discovered some late cash receipts that he has failed to claim for in the preceding year's accounts. They are presented to you, and you are satisfied that these have not already been claimed for, but are you permitted to deduct the expenses in the subsequent or even later accounting period?
To start with the accounts.
Continued...
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What about an income error
A very useful summary of what should be done on expenses either not in the original accounts or where an estimate has been adjusted later with hindsight.
What about where you discover an error on last years income calculation? I have an example where it was discovered income was understated by just under 10% in the previous year. This was an error in takings calculations. As it is a sole trader can you not amend last years accounts and tax return?
Purchase a kettle for £10
No capitalisation limit? Are you saying that for instance the purchase of an additional kettle for £10 should be capitalised?