Until FRS102 basically an error had to be Fundamental for a Prior Year adjustment to be justified
‘Fundamental’ is defined in paragraph 63 of FRS 3 as an error of such significance as to destroy the truth and fairness and hence validity of a set of financial statements
Or you could make a change as a result of a change in Accounting Policy.
This position is about to change with arrival of FRS 102. Paragraph 10.21 states that ‘an entity shall correct a material prior period error retrospectively in the first financial statements authorised for issue after its discovery’. This means that, on adoption of FRS 102, the threshold for correcting an error by use of a prior period adjustment has reduced from fundamental to material (ICAEW
The ACCA have a useful factsheet on prior year adjustments – Factsheet 188
CIS covers most construction work to buildings, including site preparation, decorating and refurbishment.
You don’t have to register if you only do certain jobs, including:
- architecture and surveying
- scaffolding hire (with no labour)
- carpet fitting
- delivering materials
- work on construction sites that is clearly not construction, eg running a canteen or site facilities
So what is being changed?
The changes are outlined in this document – CIS Link
- Reducing the Gross Status minimum turnover threshold to £100,000 a year for businesses with multiple directors (from April 2016)
- Initial and annual compliance tests will focus on fewer obligations
- Penalties triggered by failure to file a nil CIS return can be set aside on appeal from April 2015
- It will be easier for Joint Ventures to obtain Gross Status if one party already holds Gross Status
- Online verification will be mandatory from April 2017
- Earlier repayments can be made to liquidators in insolvency proceedings. Currently where a subcontractor is a company, no repayment of any amount deducted and paid over to HMRC by a contractor can be made to the subcontractor until after the end of the tax year in which the deduction was made. These rules will be amended so that in certain cases where the amount deducted by the contractor is excessive, a repayment can be made during the tax year.
- Mandatory online filing of CIS returns will be introduced with the offer of alternative filing arrangements for those unable to access an online channel by reason of age, disability, remote location or religious objection.
- The directors’ self assessment filing requirements will be removed from the initial and annual compliance tests.