VAT Calculation

[Amanda]

OK, I'm being a bit thick .....


What calculation do I use to find a Net price before Tax.

Say something is £15.00 gross and the VAT is 17.5%, what is the net price?

[Nick_69]

it sld be 2.62 if its 17.5% so the net price would be 17.62

[TazDaz]

£15 divide by 1.175 (for 17.5% VAT)...net price is therefore £12.77 (rounded).

That's how I've always done it.

[Dicky Ticker]

I'm with TD ----using 117.5 gives you base price,deducted from the total price the VAT,and the base price multiplied by 17.5 as a double check.

[Berlin]

Nope. 17.5% up is not the same as 17.5% down

Using 100 as a start, plus 17.5% is 117.5

Reducing 117.5 by 17.5% gives you 96.94

I used to be able to remember the factor you timesed it by off by heart but I've forgotten it it was so long ago.

C

[Amanda]

That's it... divided by 1.175

Fan Koo

[Luckypants]

TD is right. To get the nett price from gross (inc. VAT) price divide by 1.175. To get gross price from net multiply by 1.175.

[TazDaz]

Nope. 17.5% up is not the same as 17.5% down

I used to be able to remember the factor you timesed it by off by heart but I've forgotten it it was so long ago.

C

You are right, to an extent, but I'm pretty certain my way works.

It doesn't work if you do it the long way, and say you have £100 gross, then try to deduct 17.5%, so £100 - £17.50 = £82.50, because then 17.5% of £82.50 isn't the same as £17.50...I'm crap at explaining, but I know what I mean.

[Jabba]

Say something is £15.00 gross and the VAT is 17.5%, what is the net price?

£15.00 is 117.5% of the nett price. So the nett price is 15.00/117.5*100 = £12.77.

Dividing by 117.5 gives you 1% of the nett price, so multiply by 100 to give full nett price.

But yeah, dividing by 1.175 is quicker ;-)

[toby_smith]

I normally think of it this way.

A price including VAT is 100% + 17.5%. So 117.5%

Therefore divide your £15 by 117.5 and then multiply by 100.

Bit of a long way round bit it's a way of remembering it.

Or if you know the price without VAT and want to add the VAT on. Divide by 100 and then multiply by 117.5

[454697819]

I always thought....

Total price is 100% + 17.5 % = 117.5%

if you take 17.5% of the 117.5% you will end up with the wrong figure probably not though...

i still think 1 x 0 is 1

[Paul the 6th]

but strangely 0 x 1 is 1 :razz: think about it

[Bibio]

take your figure then divide by 1.175 then subtract your original figure which gives you a minus figure which is your vat content.

75/1.175=63.83-75= -11.17

to add content

75+17.5%(13.12)= 88.12

[Paul the 6th]

right then, next up = how do you calculate net present value?

[Viney]

OK, I'm being a bit thick .....


What calculation do I use to find a Net price before Tax.

Say something is £15.00 gross and the VAT is 17.5%, what is the net price?

The price with vat is 117.5% of the price before VAt so simply

Price/117.5 x 100 will give you the Net Price.

[Jabba]

Price/117.5 x 100 will give you the Net Price.

That's what I said. Must be right ;-)

[TazDaz]

My way is simplest...what did I win? ;)

[timwilky]

at its most basic equation breakdown as my high school maths master used to like.

x + 0.175x = 15
1.175x =15
x=15/1.175

therefore x = 12.77 or the vat is 15 - 12.77 = 2.23

[TazDaz]

right then, next up = how do you calculate net present value?

set the scenario, and I'll have a go.

[Viney]

Unless its after 01.01.11 when it will be 20%. Oh joy!

[maviczap]

Right as none of you can't get your figures right, I'm out and won't be investing

http://www.unrealitytv.co.uk/wp-content/uploads/2009/01/duncan-bannatyne.jpg

[Paul the 6th]

Well I'm actually downright offended that you've come here today...

http://www.dollymix.tv/deb.jpg

[Sosha]

N=Net Price, G = Gross Price

1.175N = G

N = G/1.175

(Well it's been posted earlier - but hey I'm digging the neatness)

[Paul the 6th]

accounting rate of return anyone?

[Reeder]

£15 gross IS £12.77 net with a vat rate of 17.5%
This is confirmed by my tax calculator with the rates set at 17.%

[Bri w]

I've always divided gross price by 6.73.

15 divided by 6.73 = 2.2288262 giving a price before vat of £12.77

[MisterTommyH]

Multiply by 0.851.

[Stephen McG]

I read the first few entries and jumped to end.
if the price includes VAT then the price without VAT is 40/47 of the (full) price.
Anyone who has ever done a VAT return will know this so if anyone else has put this then sorry to repeat.

the VAT element is (obviously) 7/47 of price

PS I am not an accountant but an engineer who was VAT reg. for 15 years

SMcG in Glasgow

[tigersaw]

The government have thoughfully decided to make vat 20% soon anyway to make it simpler to work out

[Dicky Ticker]

Having had multiple VAT Inspections and argued with the inspectors over this I know that the 100%+ the % of VAT used as the dividing figure[e.g.117.5] gives exactly the same answers as the cockeyed system they use,but easier to apply
I had different levels of VAT in my business,so what ever the percentage of VAT is, the same principle applies.

Non believers have only got to sit with a calculator and work it out.

[Spanner Man]

Good morning Bean Counters!


The VAT content of an inclusive price is 14.89%.

So, If you multiply by 14.89% you get the amount of VAT. Then hit - then = on your calculator & hey presto you get the net amount.



Cheers.

[Dicky Ticker]

Purchase price = £362.89-VAT is 17.5% so divide by 117.5= £308.84
= £308.84255
multiply by 17.5 = £ 54.04744
_____________
£ 362.88999
Rounded up £362.89

Two operations on the calculator give you all three figs
With this system you can work out any VAT providing you know the rate VAT is charged at,be it 12.5%,15.0%,17.5% or the new proposed 20%.It does not just apply to VAT but can be used on any given where a % is derived e.g. Statistics.

Not saying it is the correct mathematical approach but the simplest for the layman

[Luckypants]

Dicky, I see what your saying but you have shifted the decimal point in your first example, so it makes no sense :D

[punyXpress]

Last time I saw the VAT rules, you DID'NT round up,
So Rounded up £362.89 should be £362.88
Look after the pennies & you'll soon have enough to fill your SV tank.

[Dicky Ticker]

Yes you slide the decimal point but surely it is obvious if you want a figure that is approx 20% or 1/5th
I only rounded to the penny for the example

Like I said it is not the approved method,but works for simpletons like me:D

[Holdup]

I only know how to add vat on and thats all i need to do usualy

[keith_d]

right then, next up = how do you calculate net present value?

Simple, just sum the deflated/inflated cashflow.

The tough bit is predicting inflation well enough for the calculation to be meaningful.