How to round VAT on an invoice
VAT rarely comes out to a whole penny. Learn the rule for rounding the VAT on an invoice and keep net, VAT and gross in step.
This path is practice in how the records and the sums work. It is not tax advice. Any rate or allowance in a question is an example for that question, so check GOV.UK for the current figures.
Task 1Fractions of a penny3 questions
VAT is a percentage, so it often does not come out to a whole penny. 20% of £37.99 is £7.598.
HMRC allows the total VAT on an invoice to be rounded down to the whole penny. Any fraction of a penny is dropped.
This is rounding down, not rounding to the nearest penny. Little Acorns does it on every invoice.
Task 2One invoice, more than one rate4 questions
Task 3Taking VAT out of a gross price2 questions