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Should VAT on purchases be rounded up or rounded down? MARK ACKRILL reports on the Advocate General’s preliminary opinion in favour of HMRC in the JD Wetherspoon case
KEY POINTS
- The question of rounding fractions of a penny.
- HMRC’s guidance and concession.
- Referral to the ECJ and the Ahold case.
- The distortion of competition argument.
- The AG’s preliminary opinion in favour of HMRC.
Consumers may have noticed in the last few weeks that the cost charged at the till has often been slightly less than they had been expecting as many retailers have adjusted their prices to pass on the temporary reduction in the rate of VAT announced in this year’s Pre-Budget Report.
One issue that most traders will have encountered – all those who do not price their goods in multiples of £10.81! – is that VAT-inclusive prices must end up as a whole number of pounds and pence but the amount of VAT included in that price is...
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