- Feature Articles
- CodeSOD
- Error'd
-
Forums
-
Other Articles
- Random Article
- Alex's Soapbox
- Announcements
- Best of…
- Best of Email
- Best of the Sidebar
- Bring Your Own Code
- Coded Smorgasbord
- Mandatory Fun Day
- Off Topic
- Representative Line
- News Roundup
- Editor's Soapbox
- Software on the Rocks
- Souvenir Potpourri
- Sponsor Post
- Tales from the Interview
- The Daily WTF: Live
- Virtudyne
Admin
my gut says this comment will be second
Admin
To be honest, it is a bit naive to expect that the head of finance dept will manually test VAT calculations - if Tim had instead asked Reggie to point towards some underling who'd clarify the VAT issue & test it, then it might have been a success.
Admin
but it is outright arrogant of Reggie to not even forward Tim to an underling.
methinks Reggie didn't know himself which VAT to use
Admin
Tim has to bear some responsibility for this, unfortunately.
Sure, the finance guy should have given more guidance, but since that guidance wasn't given, Tim should have been more diligent in his research rather than relying on a gut feeling.
Especially on VAT. (VAT isn't a thing I've ever heard of US states having. It isn't the same as sales tax - the only thing they have in common is that they are taxes charged the purchase of goods or services by consumers. Oh, and that both of them are forms of double taxation, in that you are taxed when you spend money that you have already paid taxes on.) VAT is everywhere in the European Union, and the required calculations are complicated by a freaky assortment of cross-border considerations, combined with the fact that some goods are liable for VAT at different rates (on the same item) in the same country - books are zero-rated (not the same thing as unrated, mind you) in the UK, but if a book includes a CD-ROM with software on it, that CD-ROM is liable to non-zero VAT on its notional value.
And the VAT authorities (especially in the UK) are grumpy about companies getting it wrong.
So no, the notional WTF (Reggie's refusal to give Tim a useful answer) isn't credible. Reggie may bear (if he is a financial director rather than merely a head accountant) a personal criminal responsibility for the VAT being done wrong, and he would have a strong interest in the calculations being right.
And yes, Reggie could (and probably would) have been held responsible within the company for the fuck-up because it was clear that he refused to give requested guidance.
But Tim should have done his research properly rather than just guessing.
Admin
Either your comment is frist or your comment is incompetent and you should be fired.
Admin
I'm going to show some ignorance here, I'm sure someone will correct me:
There is only one way to calculate VAT - you find out the item's VAT rate and multiply by it... (currently) 1.2, 1.05 or 1 for 20%, 5% or 0%, respectively.
So not sure why the article is talking about 2 ways. If there are "2 ways", one of them is wrong.
Admin
"If there are "2 ways", one of them is wrong." Obviously, that's true...
Admin
Common German example for two ways: McDonalds meals
Same item, same end price (although the restaurants could decide to charge less for takeaway, but they don't), but different share of VAT, and all just depends on the way how it was sold, not what was sold ...
That's why McDonalds cashiers in Germany will always ask "Zum mitnehmen?" ("to take with you?"), implying the choice that gives more to them and less to the state ... (and many fast food places have been found to actually cheat on this, too)
Admin
There are two ways to calculate VAT:
Because of the necessary roundings to full cents you will have differences between both.
Admin
Also in Germany: a non-profit/charity sells stuff like T-Shirts
If the stuff is related to the purpose of the organization reduced VAT applies, if it is just promotional full rate may apply.
Get this wrong and you may loose your non-profit tax status even when using the full VAT rate where the reduced could have applied.
Yes, you can be punished for having payed the tax authorities too much in that case ...
Admin
So do you do this for each item, round each to 2 digits and sum it up then, or do you add all items with thew same VAT rate, calculate the VAT for that and round it to 2 digits then?
It's not tha simple.
Plus finding out the correct VAT rate is rather complicated, as has been said.
Admin
Correct response: "I'm going to code exactly what the specifications say, and if the code is incorrect the specifications were wrong and the person responsible for them should be fired"
Admin
Reason: In Germany end user prices have to be published including VAT. So it makes a difference for the company if they finally declare full or half VAT on the bill.
Admin
Cheers for the info chaps!
So really, the guy in the story didn't appreciate that different items might have different rates.
So he either wasn't applying the right rates to the individual items or he was trying to take a shortcut and applying a single VAT rate to the total.
To the people telling me that working out VAT on individual items and adding will not add up to adding and working out VAT on the total: If you are doing a calculation where an intermediate step gives you a set of figures to operate on, rounding these figures will obviously make them not add up to the same figure as using another method which did not produce or need that set of figures. Rounding is fundamentally wrong in this case and you are destroying your data. If you don't round, or you round to higher precision than you ultimately need, your figures WILL add up.
Before anyone jumps in with "Yeah but what do you display on the receipt??" - How you display correct/consistent figures is a different problem. Personally, I'd display all individual items NET with rows for the total of the VAT for each distinct rate.
Admin
Unless, of course, the law requires that you round each item...
Admin
Reggie might be arrogant as hell, but yes, the wtf in this case is Tim.
"The system was complex, and served such a wide variety of products that there were several VAT calculations that could be correct."
No, not could. "that were correct" is most probably the right answer here.
Tim's failure to grasp that there is not one single VAT rate for all products is black-and-white thinking and definitely a wtf.
Tim then going ahead and just picking one his gut feeling told him to pick is a second, and bigger, wtf.
He was in doubt, he approached Reggie but didn't get an answer. Ok, we've all been there. But then we try to find other people with the right knowledge and if that means going to our team lead / department head for clarification of the spec we do that. We do not throw a dice.
Admin
Himmelherrgottverdammtnochmalundzugenäht... And people give me strange looks when I tell them I want to move as far away as humanly possible...
Admin
Dear Remy Porter. I would have commented on this article, but I don’t need to comment anything. There are only two options here: either you did your job and the article is WTFery, or you’re an incompetent and it’s not. In the first case, I don’t need to comment it. In the second case, I still don’t need to comment it- and you should be fired. So which one is it, Remy?
Admin
Luckily I have never been in such a situation yet. I'm impatient with idiots like that Reggie and probably would have said he is a stupid bullshitter and should shut up and goddamn answer my question.
Admin
Fast people. http://dilbert.com/fast/2003-01-10/ It's for people who aren't thick. Which I guess Remy is a bit...
Admin
Tim could have not done this task. I think that a good developer shouldn't just implement whatever because he has no information. And Reggie was a total douche, who could have easily referred Tim to someone who could provide the information.
So in the end, everything seems to balance out fine.
Admin
true. Sometimes processes and project management can be used for ones advantage and in that case go through proper channels and wait till a real specification is available. Thats why it's preferable to only use email to communicate with idiots. For proof.
Admin
Methinks Reggie was playing "Oh, I know. I just want to see if you know."
Admin
That really should be: If you were competent, then you'd know about Dilbert Fast http://dilbert.com/fast/2003-01-10/ But as you don't, you must be an incompetent, and you should be fired.
Admin
Admin
VAT is more than just final price. The more important thing is you can deduce the costs of VAT on tools and supplies from what you pay finally. This is where all the fun starts.
Admin
Maybe the WTF refers to the fact that in some countries you can choose whether to list VAT-exclusive or VAT-inclusive prices.
In the first case, the tax is simply calculated over the listed price.
In the second case, the listed price is final, it already includes VAT and therefore it should be "decomposed" into base + tax when generating the invoice.
Case 1. €10 + 20% VAT => product €10, VAT €2, total charged €12) Case 2. €10 including 20% VAT => product €8.33, VAT €1.67, total charged €10
The specifications should say which calculation should be used.
Admin
If Tim was too insignificant and Reggie too important, how come there was nobody inbetween that could take responsibility for this?
Admin
Why not make the VAT solving portion part of a user verification process like a "captcha".
Prove you are a real human by solving this VAT calculation: A. 15% B. 2.5% C. File Not Found
The multiple choice answer used by the populace must be correct or are all the workers incompetent?
Admin
TDPHB.
CAPTCHA: augue. "It was useless to augue with Reggie."
Admin
In the UK there is a chain of stores that sells tiles who decided to apply VAT per tile (and round the result of each one) rather than on the full box of tiles (rounding on that figure).
It saved them many tens of thousands of pounds until HMRC had a look at their books.....
Admin
As mentioned, VAT regulations are complex and onerous, and the penalties for getting them wrong are massive. Most petitions for winding up a business in the UK (i.e. having them declared bankrupt) come from the tax authority, HMRC
Firstly, there are three effective VAT rates right now; 0%, 5% and 20%. Once you realise that then it is obvious that VAT needs to be applied to each line item, rounded, then totalled. This led to a monumental argument with a customer of mine, many years ago, when he argued that 20% of his total (all the goods were charged at 20%) did not equate to the total of the column. He never did accept that this was correct.
There's another little known gotcha with UK VAT, which is all VAT invoices must have an incrementing VAT document ID and there must be no gaps. Even if you spoil an invoice, if it had errors, etc, you need to maintain the document for presentation to HMRC. This is to present me giving you a VAT invoice, pocketing the 20% VAT cash, then making a fake invoice that doesn't show VAT.
If you're ever in the situation where you need to create UK VAT invoices, this HMRC page is surprisingly readable; http://www.hmrc.gov.uk/vat/managing/charging/vat-invoices.htm
One other point re VAT inclusive or exclusive pricelists; in the UK, consumer pricelists must show the VAT-inclusive price (unlike the odd situation in the US where you need to calculate your own sales tax). Commercial price lists can show either/or as long as they may it clear which prices they are showing.
Admin
Admin
Admin
Admin
Say, fuel. Where you have fuel tax, levy for the strategic petroleum reserve and VAT.
VAT gets calculated after fuel tax and levy have been added to the price set by the gas company, making it in part a tax on a tax.
Ah well. If not by that, they would get your money by some other way.
Admin
Admin
The odd situation you describe in the US is due to them having different tax rates in different states, and I believe you can reclaim some taxes that you've paid while purchasing good outside of your home state.
Of course, the real point of any tax system is to be so complicated as to be impossible for anyone to truly know everything about it. That way, the tax-payers are less likely to attempt to do battle with the Inland Revenue, claim everything on their tax return, or deny accusations that they owe tax.
Not to mention of course - think how many non-producing grey-suits it keeps employed? If we simplified the tax system, thousands of oh-so-important tax-monkey civil servants would no longer be required.
Admin
No Tim is a developer with his own competencies, responsibilities and deadlines. Its most certainly NOT his job to understand legal requirements about what VAT calculation to use when only to be able to correctly implement the business rules he has been told to. Someone from legal or finance needs to understand what VAT calculations rules need to be applied. Tim needs to then understand those identified rules well enough to correctly implement them in software.
As a developer Tim should not be effectively authoring the spec.
This is problem with the spec and the stake holder is being unhelpful. What Tim needs to do is take his E-mail directly to his manager or director; and explain the situation. Its that persons job to then march back over to Finance and explain to them they can either find someone to help or consider their project on indefinite hold.
Admin
The example I cited, about books with CD-ROMs, is an ideal case (or, rather, it was back when I first found out about it, ten years or so ago). The book itself is subject to 0% VAT(*), while the CD-ROM, for reasons that defeat me, is subject to 20% VAT. Quick, what's the VAT charged on a book+CD-ROM that sells to consumers for £20?
Answer: you don't know. It could be anywhere from nothing at all to 20/120ths of £20. Why? The before-tax price of the combination is broken into two parts, one being the price of the book alone (even though you can't buy this) and one being the price of the CD-ROM alone (even though you can't buy this either). The first is charged at 0%, and the second at 20%. To give the minimum possible amount to HMRC, most publishers put the book at £20 and the CD-ROM at £0.
(*) "subject to 0% VAT" and "not subject to VAT are different things, even if the effect on the consumer price is identical. Groceries (the ordinary stuff you buy in supermarkets) are not subject to VAT, while books are subject to 0% VAT. If the 0% rate is changed to 1%, books go up in price while groceries do not.
Admin
You also seem to belong to the camp who thinks that understanding the problem domain is unnecessary for a programmer to be effective. This is the biggest line of bullshit imaginable.
No, he should not, but when the spec is as vague as "calculate VAT in an appropriate way", he should not just invent something based on random intestinal babblements. The word you're looking for is "obstructive", possible extended to a phrase, "actively obstructive". Good luck with that. You'll need it.Admin
To add yet another gotcha to those quoted, I had an example years back where the customer was giving a discount for early payment. The VAT was calculated on the full amount before discount.
Admin
Actually, as the word 'sprint' is mentioned in the article, I'm guessing this is a Scrum project. In that case, there are much better choices for solving this kind of problem (asking team members, raising the issue at a scrum meeting, asking the scrum master or the product owner....)
TRWTF is that Tim seems to be alone in the project and has to go directly to the customer (who doesn't seem to care).
Admin
Admin
Complicated VAT - try this one...
I sell you a basket of goods. Some good are 0% VAT, some are 10% and others are at 15%. The basket of goods, including VAT now comes to £50. So far so good? But it's discount day! And I can knock £10 off your total and you pay just £40. Question... How do you calculate how much of that £40 was VAT?
This is real question - I know so because I know Reggie ;-)
Admin
This falls under the "If you have to ask, you'll never know" response given by most 12 year olds.
Admin
It gets even better when you start trying to figure out the VAT on multi-buy deals (suit and trousers for only £100, or £120 if sold separately) and a pair of shoes (£50) (standard RRP) and then apply a 10% discount voucher which is only applicable on shirts, then another 10% discount voucher only applicable on non-discounted items.
And yes, this does happen, and no it is never implemented correctly. Given the option I'll bet that accountants, when posed with this problem, would just say "don't do that.".
(urgh - my captcha was in comic sans)
Admin
Admin
Reggie creates a self-destructive working environment, costs his company millions of dollars and gets fired. Apart from the fact that TRWTF is Reggie being a dick and costing his company in the process (things people seem to think are mutually exclusive), the accountability is otherwise balanced.
We know Reggie is retarded because he failed to understand his accountability when he poorly conveyed (and probably didn't know) which VAT to use, apparently expecting the blame game to pay off for him (not spending time on the research, hoping the dev could be quickly bullied into doing it for him, perhaps).
Reggie is TRWTF because he should have done his job correctly in the first place, and was even given a second chance to rectify his mistake, which he failed to do.
Admin
If I were in that position, my response when he tried to attack my competency would be to retort: "...you don't know how to calculate VAT, do you? Should I go ask your secretary? Maybe she knows."
Captcha: ideo; that sure is a funny way to spell bacon