Rounding for VAT

The subject in dispute in this case was whether rounding of VAT amounts was permissible under EU law.

The claimant Wetherspoon plc operated pubs in the UK. It rounded down VAT to the nearest tenth of a penny at line level for each separately identified product and aggregated those amounts rounding down to the nearest penny for each transaction with the customer.

In this way the company reduced the amount of VAT it paid to the HMRC. The department did not allow the rounding down of VAT on each transaction.

The matter was referred by the VAT tribunal to the European Court of Justice for a preliminary hearing.

The ECJ said that where prices were fixed exclusive of VAT the VAT collected would be the amount paid to the state regardless of rounding.

Where VAT was included in the sale price the amount collected...