Indirect Tax correction of errors

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lifeisstrange
lifeisstrange Registered Posts: 27 Epic contributor 🐘
in AAT Level 3 (Level 6 in Scotland)
Hi everybody,

If the Input tax claimed in a previous VAT return has been overstated, do I have to add the amount in box 1 or deduct the amount in Box 4 in the next VAT return?

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  • amyjayne27
    amyjayne27 Registered Posts: 314 Dedicated contributor 🦉
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    Hi life's strange,

    I am doing this exam on Monday and I may be wrong but I think it's taken from the figure in box 4, because if I was doing a control account the overstated input tax would be put on the debit side but as a minus so it is taken away.

    I may be wrong though so anyone feel free to correct me!
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624 Beyond epic contributor 🧙‍♂️
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    I agree.
  • lifeisstrange
    lifeisstrange Registered Posts: 27 Epic contributor 🐘
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    Thanks for your reply.

    In fact, I asked the question because I have noticed that in Kaplan revision kit, we have to add the Input tax overclaimed in box 1 and in Osborne book we have to deduct the input tax overclaimed from box 4. So I am confused.
  • amyjayne27
    amyjayne27 Registered Posts: 314 Dedicated contributor 🦉
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    That is confusing! Do you have a tutor you could ask? My logic is input tax should never be added to or taken from sales, and vice versa with output tax and purchases. My book tells me to do as I said above so maybe worth clarifying with your tutor if you have one.
  • lifeisstrange
    lifeisstrange Registered Posts: 27 Epic contributor 🐘
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    Thank you for your reply Amy. I have found your post very useful. I have a tutor but I have not asked him yet because it is the weekend. Thank you again.
  • amyjayne27
    amyjayne27 Registered Posts: 314 Dedicated contributor 🦉
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    No problem at all, good luck with your studies!

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