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Where Taxpayers and Advisers Meet

fractional vat

sandyedmond
Posts:1
Joined:Wed Feb 15, 2017 1:42 pm
fractional vat

Postby sandyedmond » Wed Feb 15, 2017 1:53 pm

I pay £4.99 + vat for Microsoft365 per month. But Microsoft take £1.00 in vat (instead of £0.998) so they gain £0.002 every month which is 2.4p per year. Whilst I can afford the 2.4p it occurs to me to wonder who gets the cumulation of those thousands of 2.4pences per annum. If Microsoft take the total of all the £4.99's and pay 20% on that then they will pocket the extra. I think!! If they pay 20% on every individual £4.99 then presumably HMRC pocket the difference. Either way it's money that should stay with the subscribers.
For a company the size of Microsoft these 2.4pences represents probably a huge amount of money.
Any thoughts.
Sandy

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: fractional vat

Postby robbob » Wed Feb 15, 2017 2:28 pm

Richard Prior ? as far as i can remember he had that cunning plan first :)

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: fractional vat

Postby robbob » Wed Feb 15, 2017 5:07 pm

On a more serious note - there is guidance in notice 700 at 17.5 which i am presuming keeps bods on the straight and narrow with some formal guidance, i think Wetherspoons (seems they like nothing more than a good a good disagreement with the tax man over random stuff) tried something on and failed


https://www.gov.uk/government/publicati ... -vat-guide


VAT: ECJ decides against taxpayer in roundings case
The ECJ has decided against JD Wetherspoon in its case about rounding down VAT figures. The judgment
echoes that in the Ahold case, and concludes that there is no EU law requirement for a particular method of
rounding amounts of VAT and that it is for Member States to determine how rounding should be dealt with,
subject to the EU law principles of fiscal neutrality and proportionality. The ECJ has confirmed that
businesses that calculate their prices on a ‘VAT inclusive’ basis are in a different situation to those who work
out prices on a ‘VAT exclusive’ basis and that ‘the former cannot invoke the principle of fiscal neutrality to
claim the right also to round down, at line and basket level, the amounts of value added tax due.’


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