Home For AAT student members AQ 2013 AAT Level 2 (Level 5 in Scotland)

Vat

taylor30taylor30 New MemberRegistered Posts: 5
Hi

I'm currently studying using Kaplan Distance Learning and am unsure about how to round VAT figures. The Study text states that VAT should be rounded down, but then in the workbook this has not been done. I have always previously rounded VAT using the usual rounding rule (under .5 round down, .5 and over round up) but would be grateful for some advice on this.

Thanks

KP

Comments

  • welshwizardwelshwizard Trusted Regular South WalesRegistered Posts: 465
    Hi

    Always round VAT down - I believe overstating VAT (rounding up) could be viewed negatively by HMRC especially when you are talking of millions of pounds worth of invoices - imagine how much Tesco would make if they rounded up VAT on their sales......
  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970
    Hi welsh i also have always rounded down VAT, However now it states in the Unit 30 Osborne book that the figure is rounded up? this question comes from a fellow student in my office

    Thanks


    A-Vic
  • ToffeemadblueToffeemadblue Well-Known Registered Posts: 102
    Round it down

    In the Osbourne Tutorial second edition Units 1-4, it states
    om page 40 " VAT amounts should always be rounded down to the nearest penny, VAT amounts should not be rounded up"
    Which seems pretty clear:001_smile:
  • A-VicA-Vic Expertise Guaranteed Registered Posts: 6,970
    Yes i agree it does state that but when confirming the answers in the back of the book at times it has been rounded up thats all :001_smile:
  • taylor30taylor30 New Member Registered Posts: 5
    Thanks for all your responses. I have had a response from Kaplan stating VAT should be rounded down. Just wish they'd done this in their answers in their workbook.:001_rolleyes:
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