Interesting charge

My client recently had a VAT compliance visit by HMRC. Upon his arrival we told the officer that we had identified VAT underpayments of £8 000 on past returns which we intended to include on the next return as the amount involved was less than £10 000 i.e. the error adjustment limit for a small business.

The errors involved were not of a careless nature so penalty issues were not relevant. We showed the officer a summary of the errors and correcting journals that had already been posted to the Sage system.

The officer suggested that for simplicity he would raise an assessment for the £8 000 tax rather than wait until the next VAT return was due which we accepted as it concluded the issue quite well.

However we were...