I have identified an error in a set of accounts that was made the previous year. The error has been corrected this year and I understand that I need to restate the prior year figures in the current year accounts as per FRS105.
My query is what to do about tax - the client effectively overpaid Corp Tax last year due to the error, but will underpay it by the same amount this year upon correction of the error i.e. net effect on CT is zero over the 2 years. Should I go back and correct the error in the prior year CT600, or should I just restate the p.y. figures in this years accounts and not amend the tax return? Thoughts appreciated please