Rounding on invoices and rounding at retailers: What do we mean by rounding up and down?
The rules for this are simple:
- If the VAT on any transaction comes to less than 0.5 of one penny, it should be rounded down.
- If the VAT comes to 0.5 of one penny or more, it should be rounded up.
This is the same system as that outlined in EU Council Regulation 1103/97, which sets out the rules for converting national currency values into Euro.
However, if a trader proposes an alternative rounding method then it should be considered and allowed if it produces a fair and reasonable result.