I have recently realised that I have made errors in Corporation Tax journal entries for some (not all) past years and need to correct them and probably report the issue to HMRC.
I short, I was initially making correct liability and payments journal entries, but for 3 or four past years I did not raise liability journals (DR 8500, CR 2320), passing only the payments against DRs to 2320. For 2024/2025 I did things correctly again and will of course do so in future.
That leaves me with those years where the accounts were distorted plus, I think, an incorrect current position. I expect that I will have to report this to HMRC and submit amended accounts, but what I want to know is exactly how can I amend the accounts in QuickFile to correct them so that I have accurate balance sheets and P&L account figures to quote to them.
The QuickFile team are not registered accountants and can not give advice such as this.
I would reccomend speaking with your accountant directly but I will leave this thread open for now as there are accountants active on the forum who may wish to comment.
Thanks, I realise that you can’t assist as the supplier, but have seen useful advice from contributors in the past and hope that comments here could help me understand how to approach this and at least understand the impact of my mistakes.
Assuming you have been calculating and paying the tax correctly, you don’t need to notify HMRC or submit amended accounts. You just make the corrections in the current set of accounts, and if the errors are material, you restate the comparatives too, and add a header to the column saying they are restated.
How you amend them in Quickfile depends on whether you want QF to reflect the same position as the accounts you file, or if you want it to reflect the position as it should have been.
If the amounts are not material, you just journal in the current year to re-create the liabilities so that the balance sheet shows the correct position. Instead of debiting the tax charge in the P&L, you would debit retained earnings.
If the amounts are material, you will need to go back and correct the previous year, to show the position as it would have been if you had done all the journals correctly, and then raise the correct journal in this year’s accounts.
You can re-open each incorrect year and raise the correct journals if you wish, and this will then give you accurate accounts in this year, but it won’t agree with the filed accounts. Personally, I would put a cumulative correction through the previous year and then make sure you do the liability journals from the current year onwards.
Many thanks for your thoughts on this. I don’t think the amounts concerned are material and I have done what you say would personally have done i.e. made the cumulative correction and the accounts reflect reality now. As you say previous years’ accounts still match the filing despite being slightly wrong and I agree it is better left that way. I will certainly be posting the proper entries each year from now on. Many thanks again.
If the errors are not material, just journal the missing liabilities in the current year (debit retained earnings instead of P&L) to show the correct balance sheet. If material, adjust the past years by reopening them in QuickFile and posting the correct journals, then post this year’s entries normally. This ensures accurate accounts while keeping HMRC filings consistent.