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HMRC internal manual

VAT Assessments and Error Correction

From
HM Revenue & Customs
Updated
, see all updates

Prime assessments procedures: Examples of the final period calculation

Example 1

Date of deregistration 26 July 2007
   
Previous tax period 05/07
Days in final period (1 June 2007 to 25 July 2007) 55
Days in period 05/07 92
Tax due for 05/07 (or assessed amount £1,236.54
Calculation of assessed amount 55/92 x £1,236.54 = £739.24

Assessment to be issued for £739.00, plus any tax due on stock and assets.

If the trader is in the cash accounting scheme and there is not a more accurate figure, to arrive at the total assessment amount you would add 50% of £1,236.00 to £739.00 = £1357.00 then add any tax due on stocks and assets.

Example 2

Date of deregistration 26 July 2007
   
Previous tax period 05/07

But period 05/07 was a repayment return

Look at the period immediately prior to 05/07, for example 02/07. Calculation is then as follows

Days in final period 55
   
Days in 02/07 90
Tax due or assessed for 02/07 £1462.45
Calculation of assessed amount 55/90 x £1,462.45 = £893.72

Assessment to be issued for £894.00 plus any tax due on stocks and assets.

If period 02/07 was also a repayment return, are you sure that tax is due for the final period apart from that due on stocks and assets?

If trader is in the cash accounting scheme, to arrive at the total assessment amount you would add 50% of £1,462.00 to £894.00 = £1,625.00 then add any tax due on stocks and assets.