How To: Deal with VAT rounding issues
Table Of Contents
If you enter £9.99 into the gross value field on a sales order and Khaos Control changes it to £10.00, this is normally caused by the VAT calculation method being used on the order.
Scenario
When adding a stock item to a Sales Order:
- You enter a gross value of £9.99.
- The value is automatically changed by Khaos Control to £10.00.
Why This Happens
When you enter £9.99 as the gross price, Khaos Control first calculates the net value.
For example:
| Value | Amount |
|---|---|
| Gross Price | £9.99 |
| Calculated Net Price | £8.33 |
If your system is configured to calculate VAT from the Net value, Khaos Control then recalculates the VAT based on the rounded net price:
| Value | Amount |
|---|---|
| Net Price | £8.33 |
| VAT | £1.67 |
| Recalculated Gross Price | £10.00 |
As a result, the original gross value of £9.99 becomes £10.00 after the VAT calculation is applied.
For more information about this setting, see Calculate Unit Based on Taxability.
Resolution
If you want Khaos Control to preserve the gross price entered, change the calculation method on the sales order.
- Open the [ Sales Orders | Detail | Additional ] tab.
- Locate the Calc Method setting.
- Change the calculation method from Net to Gross.
Once the calculation method is set to Gross, Khaos Control will calculate from the gross value entered and avoid the rounding behaviour described above.
Additional Information
The way VAT is calculated can affect how prices are rounded and displayed on sales orders.
For a detailed explanation of the available VAT calculation methods, see:
Summary
If £9.99 changes to £10.00, it is usually because:
- The order is using Net-based VAT calculations.
- The net value is rounded before VAT is recalculated.
- The recalculation produces a gross amount of £10.00.
Switching the Calc Method to Gross on the sales order will prevent this behaviour where appropriate.