ACCA · Question 20 · Value added tax (VAT)
Section B - Case 1: Nimbus SaaS Ltd
Nimbus SaaS Ltd is a UK-based tech startup providing cloud software subscriptions. The company supplies digital services to both B2B (business) and B2C (consumer) clients globally.
Nimbus discovers an error in its previous VAT return where it under-declared output VAT by £8,000. Its total turnover for the current period is £1.2 million. How should Nimbus correct this error?
Answer options:
By adjusting the current period's VAT return, as the error is below £10,000.
By submitting a separate Form VAT652 to HMRC.
By requesting HMRC to amend the previous return.
By ignoring it, as it falls within the statutory tolerance.
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