Businesses will have to round up VAT liabilities as well as rounding down,
judgment that gave European member states the right to decide on the issue.
Some companies have attempted to make substantial VAT savings, by rounding
down fractions of a penny of tax owed on individual items sold.
Dutch company Albert Heijn had tried to make a claim for a VAT repayment on
the basis of rounding down every item sold, rather than on the usual basis of
rounding up or down on the basis of a basket of goods.
The ECJ ruled that the issues were not a matter for community law, and that
member states could make their own mind up.
Tiles case, which came before the VAT tribunals in 2006, established in the
UK that VAT should be rounded up as well as down on collections of goods.
HMRC said in a statement: ‘HM Revenue and Customs welcomes this ECJ ruling
which clarifies the correct treatment of VAT included in tax-inclusive prices.
HMRC’s existing policy and published guidance are correct and therefore remain
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