Commentary

V7.302 Ensuring VAT returns are accurate

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.302 Ensuring VAT returns are accurate

Part V7 Tax planning | Commentary

V7.302 Ensuring VAT returns are accurate

The penalty system that came into effect on 1 April 2009 for VAT considers a taxpayer's behaviour in relation to underpayments of tax. The essential question is, did the taxpayer take reasonable care in ensuring his VAT return was accurate?

It is accepted by HMRC (and is a fact of human nature) that errors will be made – but it is a responsibility of the taxpayer to minimise the risk of errors taking place by applying sensible checks on the returns before they are submitted. The four checklists that follow give practical tips and advice to help a business not only get its VAT affairs right but also to identify some tax-saving opportunities and measures that could help to simplify VAT accounting procedures:

VAT returns

  1.  

    •     Are all VAT returns and payments up to date?

  2.  

    •     If payments are not up to date, has a payment schedule been agreed with HMRC's Business Payment Support Service?

  3.  

    •     Does the VAT creditor balance in the nominal ledger reconcile to the Box 5 payment figure on the relevant VAT return?

  4.  

    •     Have any VAT errors been adjusted by the client on recent VAT returns? If they were underpayments, should a separate disclosure be made to HMRC to avoid a potential

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