I have a new limited company client and in reviewing the prior three years accounts, they all look pretty normal except the Use of Home journal which looks suspiciously round at £1,250 for each of the previous years. It obvious the previous accountant just estimated the figure. In discussions with the client, the figure should be closer to £700 - £800 for each year.
The DLA is a credit balance i.e. the company owes the director and changing the amount will not affect his personal tax over this period but will obviously affect the corp tax.
Would you just post a correcting journal for all three years which would be approx £1,500, in the current year or would you contact HMRC re the prior years? I am just conscious of the reduction in corp tax (1% yay!!) as there would be a benefit of approx £15 to the taxpayer of doing it this year.
It is a lot of work for the client to get historic bills etc and do the calcs but he is keen to get it right.