VAT Methods

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This is a short guide to the VAT figures given on Shopwave reports. In the above example you can see the VAT values of some products in the column entitled “VAT @ 20% (RAW)”.

The caculated VAT amount for a product often gives a non-round value. There are 2 ways of rounding this figure for accounting purposes.

Calculating VAT on Line Total fig1

The sale prices inclusive of VAT for each product are added together. The VAT is calculated based on this single total figure and rounded down to the nearest penny. Using this method only one total figure is rounded.

Calculating VAT on Unit Price fig2

The VAT amount for each individual product sold is calculated and rounded. It is always rounded down to the nearest penny. All of these rounded figures are then added together to give you your total VAT payable. Using this method each raw vat amount is rounded.

Shopwave

Shopwave uses the more advanced ‘Calculating VAT on unit price’ method. It can result in a lower amount of VAT payable overall so is beneficial to the retailer in comparison to calculating VAT on line total.

Due to rounding, the VAT value on Shopwave reports does not equal (Total sales ex.VAT)x(VAT percentage).

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