Calculations and rounding for HMRC

[tom125]

Incredibly newbie question here, but say if I have a list of payments, e.g £254.56, £36.98 and £89.32, and I needed to add them up and then provide HMRC with the whole-number final figure, do I round them (up or down?) before I add them up or after?

I've been told that HMRC want you to round them down, whatever value (essentially knock the decimals off). So if was to do this before adding up, with the numbers above, I'd have £254 + £36 + £89 = £379. However with a lot of payments, you'd miss a lot of money out (in just these payments, I'm missing £0.56 + £0.98 + £0.32 = £1.86 already). If I rounded (again, down I think) after adding them up, it wouldn't be so bad, only £254.56 + £36.98 + £89.32 = £380.86 = £380, loosing £0.86.

I may have got this totally wrong, in which case I'd be delighted to be taught what to do. Thank you for any help/advice

 

[Scalloway]

You should put the exact amounts through your books. You just round up totals when you enter them on your tax return.

 

[tom125]

Hey Scalloway, thanks for answering So I'd add them all up normally (£380.86) and then round up (£381)? If it was below 0.5 e.g £380.42, would I round down to £380? Sorry to ask a seemingly simple question again but I don't want to get my numbers wrong for HMRC.

 

[Scalloway]

Yes that is what I would do.

 

[UK Contractor Accountant]

No you always round to the taxpayers advantage. So 380.42 gets rounded to 381 if is an expense claim and 380 if it's income.

 

[MyAccountantOnline]

I'm with UK Contractor always round in your favour.

 

[MyAccountantOnline]

HMRC actually tell you to do this in the tax return guidance notes

 

[Karimbo]

Always use actual figures for your calculations as the pence are useful for reconciliation work, submited rounded totals to HMRC - it will never make a material difference anyway - AFAIK on self assessment you can't even put decimals you put in whole pounds.