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

VAT rounded up or down on Prompt Payment Discount

Hi there, I am currently studying Level 2 and have the Bookkeeping Transactions exam coming up on 27th February. As a general rule I know that VAT is always rounded down when working on invoices. However, using the AAT Course Book from BPP learning media, the answers are rounding up the VAT after discounting the Gross total for Prompt payment discount. (Page 83, question 3 (b) and Page 112, question 2 (b) ).

Could someone please clarify:

* whether the general rule is to round the VAT up or down in this instance,
* how AAT will be marking the papers (ie rounded up or down).

As this could mean losing marks on these questions, it could also be the difference between passing and failing the paper. My tutor has also been searching for the answer.

I would really appreciate any response and look forward to hearing from you. Debbie

Comments

  • shannonr1990shannonr1990 Registered Posts: 36
    Did you ever find out the answer to this? I always thought it was rounded down to the nearest penny?
  • rothersrothers Registered Posts: 9
    I think that the VAT man can't take more than what is precisely due therefore when VAT is being PAID you round down.

    When VAT is being received or refunded as in discount received it has to be rounded up so that it is on the side of the business rather than the VAT man.
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