Can anyone tell me why Qb calculates vat wrong?Eg: £650.04 plus vat @ 20%Qb works out £130.04 vatTotal £780.08Customer pays £780.05 correct total3p balance leftover?

Welcome to the Community, mjs.systems! It's wonderful to see your first post, and I truly appreciate your attention to detail! Ensuring accurate tax calculations is vital for a smooth filing process. I'm here to explain how VAT is calculated in QuickBooks Online (QBO) to help clarify any confusion you may have.

Based on the HMRC VAT guide, when calculating VAT at the line or invoice level, you'll have to make sure not to round down the VAT amount. However, you are allowed to round up (or down) each individual VAT calculation. Here’s a quick summary for you:

• Round down if the VAT on any transaction comes to less than 0.5 of one penny.
• Round up if the VAT comes to 0.5 of one penny or more.

That said whether your sales transaction is tax-exempt or not, the 20% VAT on £650.04 should be £130.01, not £130.04. Therefore, when you calculate £650.04 and £130.01 together, the total amount your customer will pay is £780.05. Please see the screenshot below for your reference.

Feel free to visit this article for more details: Set up and manage VAT in QuickBooks. 

Additionally, when you're ready to record a VAT payment in QBO, I encourage you to check out this informative article. It provides a clear, step-by-step guide to help you navigate the entire procedure seamlessly: Track VAT payment or refund in QuickBooks.

If you have any more questions or need further clarification about tax calculation in QBO, please feel free to click the Reply button. I’m always here to help! I wish you all the best, mjs.systems. Have an amazing day ahead!