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## Rounding up issues on products with VAT

Last post Sun, Apr 15 2012, 10:02 AM by huckster. 1 replies.

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#### Re: Rounding up issues on products with VAT

 Enjoy reading !! What else would you rather do on a Sunday ? http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&propertyType=document&id=HMCE_CL_001596#P1387_111313 From what I gather, some round up on the individual product( line by line ) so they get the rounding up correct, where there are multiple products on the invoice and others will do it on the total, if the invoice is just for one product. If you round up on unit price at the start and you only have once product on the invoice, you are then charging the customer much more. I have not studied the HMRC document, but from what I gather, both can be acceptable. The different accounting software used by companies, will produce different results. Personally, I would go back to supplier 2 and ask why they are over charging VAT on an invoice for one product. Get them to look into this with HMRC and come back to you.
• Post Points: 5

#### Rounding up issues on products with VAT

 No one (including my accountant or any suppliers) can answer my :( Q:- 1 sheet of plasterboard is 1.2m x 2.4m There is 2.88m2 in 1 sheet Different suppliers round up/down in different ways Supplier 1 charges 1.216 (yes they go to 3 decimal points, sometimes more!) Supplier 2 charges 1.216 We buy 1,000,000.00 boards per year from each supplier Supplier 1 calculates there's as follows 1.216 x 2.88 x 1,000,000.00 = £3,502.080.00 + VAT @ 20% £700,416.00 = £4,202,496.00 Supplier 2 calculates there's as follows 1.22 (note they round up or down 1st) x 2.88 x 1,000,000.00 = £3,513,600.00+ VAT @ 20% £702,720 = £4,216,320.00 A staggering £13,824.00 difference! Any ones help on this would be greatly appreciated. Regards John hesler
• Post Points: 20