It would be great to have some opinions on this...
Ltd Co reporting undr FRS105. Also an employer with a PAYE scheme. Annual T/O approx ranges between £160k and £220k. Annual PAYE bill between £1,500 and £2,700, offset by successfully claimed Employment Allowance. Previous Accountant did not adjust for the EA, so left a liability of c. £6.7k which seems to have built up over a few years.
In my opinion, the annual amounts are not material, and so the Stat Accounts do not need re-stating for prior years. Simply a singe adjustment to the current year.
Prior year was a loss, all of which was carried back, and the refund received. The client is new to me, so I haven't yet seen the CT600 for the year before that (of course, I can request it from them).
Obviuosly, the correct adjustment in the prior year would have meant a credit to the P&L, and corresponding lower CT carry back relief. I'm not so worried about that, as it is withing the 12 mth limit for amendment.
My issue is with the remaining liabiity - which presumably pre-dates the Prior Year - after both that year and the current year are adjusted for. To illustrate: Unadjusted current year Balance Sheet balance (£6,700), current year adjstment £2,700, prior year adjustment £2,300, remaining liabiliity to clear £1,700.
As you can imagine, I would prefer not to get involved in going an additional year back and potentially opeining up a can of worms which I had nothing to do with, but I would also like to get it right! I'm wondering about writing back the £1,700 in the current year, so the balance from there on in is correct. I'd love to be able to simply write the whole £6.7k back as a current year correction, because in terms of CT, it will all iron itself out.
Would love to hear what others think.