Indirect Tax- rounding VAT up or down??

rhian

Hi, my exam is tomorrow and I'm getting a bit panicky about this whole rounding up/down situation.

In the reference material, it states you round VAT down to the nearest PENCE. In the VAT return examples in the book, you simply chop off the pennies i.e. round down to the nearest POUND. And in some practise papers they have rounded up which completely contradicts both previous points.

It's such a small thing but if it means a difference between a pass and a fail then I really need to know what to do! It's not right that they seem to use different rules which throws students off like this! It's worrying to say the least.

Thank you for any help!

wbauk2002

I havent took this yet, but when I had my own company and did VAT returns the HMRC were only interested in the £'s owed to them so i guess this would be chopping the pence off

I reckon it would say in exam what to do so guess you have to learn the different methods

rhian

wbauk2002 wrote: »

I havent took this yet, but when I had my own company and did VAT returns the HMRC were only interested in the £'s owed to them so i guess this would be chopping the pence off

I reckon it would say in exam what to do so guess you have to learn the different methods

hi, thank you for your response. i'll look out for what it states in the exam, otherwise i think i'll stick to what you say with rounding down to the nearest £!

thanks again

SandyHood

It's such a small thing but if it means a difference between a pass and a fail then I really need to know what to do!

Round down
This is not an issue that will cause the VAT office to impose fines and it certainly isn't something anyone can blame for failing an exam.