Prior year adjustment following tax investigation

Prior year adjustment following tax investigation

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We have been through a tax investigation, the upshot of which was that £80,000 of fixed assets are now being treated as personal. The adjustment goes back 4 years.

Is it acceptable to do a prior year adjustment in the latest accounts, or would it be necessary to go back and revise each year's filed accounts?

Chris Southon

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Euan's picture
By Euan MacLennan
28th Feb 2008 17:45

Why adjust ?
Under s.245(2)(a) CA 1985 (and s.454(2)(a) CA 2006 which replaces it in April), accounts which have been filed at Companies House can only be revised to the extent that they did not comply with the requirements of the relevant Act. If it was thought that the assets were company assets when the previous 4 years of accounts were prepared, there is no ground for revising the accounts. Just remove them in the year in which you accepted the HMRC conclusion that the assets did not belong to the company.

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