beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

VAT Assessments and Error Correction

Prime assessments procedures: Final period assessment for return covering last day of registration

Where you are raising a final period assessment and the return on file covers the last day of registration a form VAT127 must be completed.

Note: Form VAT127 (pro forma nil return) is to be countersigned by line management or in line with agreed local procedures

Circumstance 1

Tax due on stock and assets below de-minimus level and no tax outstanding under cash accounting scheme


  • Complete and forward pro-forma nil return (VAT127) for period 99/99 to Banking Operations, Southend, under Section 4A (Finals)


Circumstance 2

Tax due on stock and assets in excess of de-minimus level and/or tax due from traders on outstanding supplies made and received during last 12 months of trading in the cash accounting scheme. Payment return on file.


  • Complete and forward pro-forma nil return (Form VAT127) code 2 for return period (NOT 99/99), to Banking Operations, Section 6, Unit 10 (Batching).
  • Prepare an assessment in duplicate on form VAT152A for the final period (99/99). This should include

    • Tax declared on return.
    • Tax due on stock and assets where this is more than de-minimus level and not declared on the return and/or,
    • Tax due under the cash accounting scheme. Unless a more accurate figure is readily available this is to be calculated at 50% of the tax due on the return covering the final period excluding any VAT due on stock and assets. If trading ceased during the period, 50% of the tax declared for the previous quarterly period should be added either of the above. For examples of how to calculate a final period assessment see VAEC2540.
  • Issue the assessment to the trader together with form VAT884 (Explanation of Final Period Assessment Tax Due on Stock and Assets). Pending revision of the form it is, where appropriate, to be amended to include a statement that the total amount assessed includes £……. Due under the cash accounting scheme. It may be necessary to uplift an assessment for a trader who was previously in the cash accounting scheme.
  • Input the form VAT152A using VALID.
  • Attach the duplicate copy of the assessment to the assessment calculation papers and file in the traders folder.