Regulation 13 Correction of errorsF1I1

In this regulation—

• “overdeclaration” means, in relation to any return, the amount (if any) which was wrongly treated as tax due for the accounting period concerned and which caused the amount of tax which was payable to be overstated, or the entitlement to a payment under regulation 20 to be understated (or both) or would have caused such an overstatement or understatement were it not for the existence of an underdeclaration in relation to that return;

• “underdeclaration” means, in relation to any return, the aggregate of—

  1. (a)

     the amount (if any) of tax due for the accounting period concerned which was not taken into account; and

  2. (b)

     the amount (if any) which was wrongly deducted as credit,

  and which caused the amount of tax which was payable to be understated, or the entitlement to a payment under regulation 20 to be overstated (or both) or would have caused such an understatement or overstatement were it not for the existence of an overdeclaration in relation to that return.

This regulation applies where a F2registered person has made a return which was inaccurate as the result of an overdeclaration or underdeclaration.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Where in any accounting period—

he may enter the F9overdeclarations or underdeclarations in his return for the accounting period in which they were discovered by including their amount in F10the boxes for underdeclarations and overdeclarations as appropriate in the form referred to in regulation 11(1).

F11But if the registered person’s VAT turnover is small, the total mentioned in sub-paragraph (b) must not for these purposes exceed 1% of that turnover unless the total is F12£10,000 or less.

And if that person is not registered for VAT, the total mentioned in sub-paragraph (b) must not for these purposes exceed £10,000.

F13The VAT turnover is small only if Box 6 of that person’s value added tax return for the prescribed accounting period in which the discovery is made must contain a total less than £5,000,000 (total value of sales and all other outputs excluding any value added tax).

(See sections 96(1) and 1 of the Value Added Tax Act 1994 for “VAT” and “value added tax”, and sections 96(2) and 3 of and Schedules 1 to 3A to that Act about being registered for VAT; regulations 2(1) and 25 of and Schedule 1 Forms 4 and 5 to the Value Added Tax Regulations 1995 for the meaning carried by “Box 6” and “return”; sections 96(1) and 25(1) of that Act and regulations 2(1), 25 and 99(1) of those Regulations for the meaning carried by “prescribed accounting period”; section 24(2) of that Act for “output tax”.)

Where a F14registered person enters an amount in a return in accordance with paragraph F15... (4) above he shall calculate the tax payable by him or the payment to which he is entitled accordingly.

Where an amount has been entered in accordance with this regulation in a return which has been made—

No amount shall be entered in a return in respect of any overdeclaration or underdeclaration except in accordance with this regulation; and as regards any underdeclaration that cannot be corrected under paragraph (4) above a person shall not be taken to have furnished information with respect to an inaccuracy in the prescribed form and manner for the purposes of paragraph 20 of Schedule 5 to the Act unless he provides such information to the Commissioners in writing.