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HMRC internal manual

Tax Credits Manual

Payment - payment profile: Payment profile - rounding difference (Info)

The daily rates for each entitlement and for each entitlement period will be calculated, along with any rounding difference for each entitlement period. The rounding difference from the conversion to a daily rate and for each entitlement period will be added together. The total of all of these rounding differences will be included with the first regular payment.

A rounding difference can occur when the daily rates are calculated. When the tax credit award is divided by the number of days in the entitlement period, the daily rate is rounded down to whole pence. When multiplied back up for the number of days the total will be lower than the amount of entitlement. The difference will be paid to the applicant with their first regular payment.


  • a customer is entitled to £1,512.32 for the full year. The daily rate is £1,512.32 divided by 365 equalling £4.1433. This is rounded down to £4.14.
  • the weekly rate paid to the customer is £4.14 multiplied by 365 equalling £1,511.10 over 52 weeks equalling £29.0596 weekly. This is rounded down to £29.05.
  • the rounding difference is the difference between their entitlement (£1,512.32) and the amount they will be paid (£29.05 multiplied by 52) equalling £1,512.32 minus £1510.60 equalling £1.72.

This amount (£1.72 in this example) will be added to the first direct payment made to the customer.