VAEC2540 - Prime assessments procedures: Examples of the final period calculation

The procedural guidance in this manual only covers the VAT Mainframe and VISION processes. For guidance on the Making Tax Digital and ETMP processes for fully migrated customers, see VAEC0200 and the Making Tax Digital for VAT compliance toolkit.

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 - 05/07 tax period
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

Example 2 - 02/07 tax period
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.