When we use the standard gift aid claim calculation of [Total Gift Amount ⁄ (100 - Tax Rate)] x Tax Rate This will result in rounding either up or down of the pence value submitted to HMRC. The rounding occurs in both the R68 report and then again when HMRC are calculating the amount to pay the charity. Our rounding practices sometimes differ from those used by HMRC resulting in a small difference in the claim amount.
The rounding is applied to each transaction on the report individually resulting in the need for rounding. We have checked with HMRC who advised they are not concerned about the pence value rounding.
Since April 2013 our system calculates the tax due on each individual donation listed on the Gift Aid schedule. The tax due is rounded 'up or down' to the nearest penny. E.g.. Donation = £19.99, tax due = £5, Donation = £19.49, tax due = £4.87, Donation = £19.70, tax due = £4.93
The actual repayment paid to a charity is the total of the separate tax calculations i.e. £5 + £4.87 + £4.93 = £14.80.
Example 1: Total: 102.98 Calculated Amount: 25.745 Should this be rounded to 25.74 (nearest even) - OR, 25.75
HMRC advised that "this is a very unusual donation amount and it doesn't matter if you round up to £25.75 or down to £25.74."
Steps to Duplicate
1. Go to revenue > R68 2. Click on existing claim 3. Select history 4. Expand the report 5. Scroll to the bottom and note the total + total claimed 6. Gift aid formula is [Total Gift Amount ⁄ (100 - Tax Rate)] x Tax Rate 7. Note the total is not matching what is seen on the report or the amount sent to HMRC on the XML file.
Example 1: Total: 102.98 Calculated Amount: 25.745 Should this be rounded to 25.74 (nearest even) - this could be round up to £25.75 or down to £25.74.
Example 2: Total: 89.25 Calculated Amount: 22.3125 - HMRC's system would round down the tax due to £22.31 (standard rounding) Our R68 shows 22.32 (ceiling round)