rounding on VAT return

pirate

Hi there

just wanted to be sure on the rounding for VAT on the VAT return

In my book it suggest always rounding down to the nearest penny so VAT that is calculated as 32.8125 become 32.81 and VAT of 13.125 becomes 13.12 but in another example when the VAT is 36.6765 I would have put 36.67, but my book has put this is 36.68 which is how you would normal round to the nearest penny.

In the BPP notes it suggest that you round down to 1p so that 86.76 become 86.7 or you round to nearest .5p so 86.7 becomes 87p

In my example VAT is £7888.57525 do I round down to the nearest .1p and should it be 2 decimal places
so I have £7888.57 for the VAT return

PGM

I believe you round down, always down to the penny.

So £80.588 becomes £80.58

But many companies seem to round up, probably depends on the software that companies use.

Monsoon

You round tax down.

Some software (older versions of Sage and Quickbooks spring to mind) will use standard maths rules, and round up if the 3rd decimal place is 5 or more. However strictly speaking for tax this is wrong.

pirate

Thanks PGM and Jenni
Thats what I thought but wanted to make sure