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Poundland - 16p in VAT and a ghost plastic bag?

21
Found 13th Dec 2013
I recently purchased a small item for a pound from Poundland (a multiplug) and noticed that the receipt stated that the VAT came to 16p.

My question is, how does that work out? I may be a less than gifted mathematician, however surely VAT is at 20%, so the VAT on the recipt would be 17p (item would be 83p with 20% on) and as I remember you should round up according to HMRC rules.

Is it something to do with the plastic bag that was added onto my recipt, unasked for and at a cost of £0.00. I refused the bag when asked, because it was much bigger than the item!

So what benefits does Poundland adding plastic bags onto my receipt, and why the penny off the VAT? Come on shopkeepers and general businessmen of HUKD. Show your massive brains!
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AskBag
21 Comments
http://i39.tinypic.com/288qb6v.jpg
Here is my massive brain...

http://www.bboyscience.com/wp-content/uploads/2012/02/homerbrain.jpg
Probably an error I.e. it has been input incorrectly on that till accidentally.
jesus
be interesting to find out how this worked out
more importantly


why is your name MRFERRET, yet you are a cat
http://cdn.memegenerator.net/instances/500x/43831455.jpg
Edited by: "transit" 13th Dec 2013
Original Poster
Terrabytes

HMRC rules on calculating VAT on invoices:"The final total amount of VAT … HMRC rules on calculating VAT on invoices:"The final total amount of VAT payable may be rounded down to the nearest whole penny."



Excellent answer! Thanks. So its a choice thing to round down, interesting!

Here is an idea, to save the countries finances, all VAT must be rounded up to the larger number to the benefit of the HMRC. No picky choosy Think of all those fractions of pennies rolling in, its like the plotline of every hacker movie ever!
Original Poster
Terrabytes response just vanished. Was he embarrassed that I would click 'Like' on his post, or has HMRC had him assassinated for actually understanding tax. A dangerous man/woman/trained ocelot indeed!
Original Poster
RossD89

Probably an error I.e. it has been input incorrectly on that till … Probably an error I.e. it has been input incorrectly on that till accidentally.



I am a naturally suspicious type. I doubt an error occured that wouldn't be to the benefit of a large company.
MrFerret

its like the plotline of every hacker movie ever!



Yeah, sounds like a real blockbuster.
Original Poster
Havince

more importantlywhy is your name MRFERRET, yet you are a cat



My first name is actually Fluffypaws Mewsbury Ferret IV. Just so you know.
transit



I don't know what this meme is...

Original Poster
transit

Yeah, sounds like a real blockbuster.



http://en.wikipedia.org/wiki/Hackers_(film)

http://uploads.neatorama.com/wp-content/uploads/2010/03/Hack-the-planet.jpg

MrFerret

I am a naturally suspicious type. I doubt an error occured that wouldn't … I am a naturally suspicious type. I doubt an error occured that wouldn't be to the benefit of a large company.



Lol how do you see this benefiting them? Do you think their accountants are hiding the extra 4% in VAT from the taxman? that'll end well for them.
Original Poster
VAT doesn't work that way, 20% isn't 20p in a pound as the pound includes the VAT, it is 17p (rounded up) calculated from 83P . I am wondering where 1% the VAT went. Turns out that HMRC allows companies to round up or down, of course they choose to round the VAT down, and the amount they take up. So they gain varying percentage point of a penny!

I was seeing the rounding difference, and yes it does matter to a company very much! Applied across a whole business with millions of daily transactions rounding can add or subtract millions from income, and a type of fraud called 'salami slicing' is actually used steal money, in tiny fractions of a penny such as that which is calculated by VAT rounding and is siphoned off into external bank accounts.

I shall now buy three items and see if VAT is applied to each individual items, or the sale as a whole. However I don't need a 4 pack of close dated weirdly small chocolate bars, a funny smelling ipad case and a biography of a z list celeb just yet so may be a few weeks until I give it a try.

Why am I interested in this. WHY!
This also interests me alot too, I look forward to the answer. I remember reading about comet changing their prices from ending in 97p to 99p and it adding over a million pounds to their turnover, years ago obviously
My favourite thread of the year...and it's got lots of cats in it.
+ VAT
It's Christmas, the Ghost bag is to get you in the right Spirit ....
MrFerret

VAT doesn't work that way, 20% isn't 20p in a pound as the pound includes … VAT doesn't work that way, 20% isn't 20p in a pound as the pound includes the VAT, it is 17p (rounded up) calculated from 83P . I am wondering where 1% the VAT went. Turns out that HMRC allows companies to round up or down, of course they choose to round the VAT down, and the amount they take up. So they gain varying percentage point of a penny! I was seeing the rounding difference, and yes it does matter to a company very much! Applied across a whole business with millions of daily transactions rounding can add or subtract millions from income, and a type of fraud called 'salami slicing' is actually used steal money, in tiny fractions of a penny such as that which is calculated by VAT rounding and is siphoned off into external bank accounts. I shall now buy three items and see if VAT is applied to each individual items, or the sale as a whole. However I don't need a 4 pack of close dated weirdly small chocolate bars, a funny smelling ipad case and a biography of a z list celeb just yet so may be a few weeks until I give it a try.Why am I interested in this. WHY!



I didn't read what you said properly. I thought you said the receipt sait 16%, not 16p.
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