In the May 2005 edition of BT's _Update_ flier which goes out with domestic bills, there's a little paragraph on p10 headed "Changes to VAT charges on your BT Bill" and reading "The way VAT is added to your BT Bill will change. Currently the VAT total is rounded down to the nearest penny but as of the June 17th 2005 [sic] VAT will be rounded up to the nearest whole penny."
This was reported on BBC2's _Working Lunch_ on 2nd June, but not at all satisfactorily. A little preliminary checking on my part in the VAT700 guide indicates that BT isn't permitted by HMCE (now HMRC) to round VAT in this proposed fashion, but before I get my guns blazing I'd like to check the facts with people here, who might know a lot more about exactly how VAT has been dealt with in the past on these bills and how exactly it's going to change.
What's odd -- and this is one thing which Working Lunch DID report correctly -- is that the only winner out of this proposal is HMRC, not BT. Unless BT is going to switch to some kind of "averaging" method for repaying VAT to HMRC, in which case it does become advantageous to notch up the amounts it collects...
Matti