# VAT Calculation question

K

#### Keith.F

My maths is not up to this...

How can I work backwards from a net price of an article to find out what the amount of VAT on it was?

i.e.. if I paid £10 for an item what calculation would I need to do to establish how much of that was VAT.

Thanks,

Keith

D

#### Doug Ramage

Keith.F said:
My maths is not up to this...

How can I work backwards from a net price of an article to find out what the amount of VAT on it was?

i.e.. if I paid £10 for an item what calculation would I need to do to
establish how much of that was VAT.
Thanks,

Keith
For gross - multiply by 7/47. Therefore, £11.75 (gross) has a vat content of
£1.75.

For net, multiply by 1.175, then again by 7/47. Therefore £10 (net) = £11.75
(gross), and vat of £1.75.

RR may well have quicker method?

K

#### Keith.F

Thanks Doug.

In the event of tax changes, is there a simple way of calculating the 'multiplier' for any particular tax rate.

'<<For gross - multiply by 7/47'>>

so I can put it into a spreadsheet and just change the 'tax rate' cell referring other formulas to it..
How do we get the 7/47 from the tax rate?

T

#### Tim

For net, multiply by 1.175, then again by 7/47.
Why not simply multiply by 7/40??

"Therefore £10 (net) has vat of: £10 x 7/40, ie £1.75.

T

#### Tim

How do we get the 7/47 from the tax rate?
When rate is 17.5%, you can get 7/47 from :- (17.5 / 117.5) ...

For 15% (say), you would use 15 / 115 = (3 / 23).

K

#### Keith.F

Brilliant, thanks.Tim and Doug

J

#### john boyle

Keith.F said:
Thanks Doug.

In the event of tax changes, is there a simple way of calculating the
'multiplier' for any particular tax rate.

'<<For gross - multiply by 7/47'>>

so I can put it into a spreadsheet and just change the 'tax rate' cell
referring other formulas to it..
Divide the amount you pay by 1 plus the VAT rate divided by 100.

So 10.00/(1+(17.5/100)) gives you the 'non vat' amount which you can the
subtract from the amount you paid.

How do we get the 7/47 from the tax rate?
This way is useless.

J

#### john boyle

Doug Ramage said:
For gross - multiply by 7/47. Therefore, £11.75 (gross) has a vat content of
£1.75.
Why not divide by 1.175?
For net, multiply by 1.175, then again by 7/47. Therefore £10 (net) = £11.75
(gross), and vat of £1.75.

RR may well have quicker method?
JB has. Multiply by .175

In both cases express the VAT rate as a decimal equivalent, NOT as a
percentage.

N

#### Nebulous

john boyle said:
Divide the amount you pay by 1 plus the VAT rate divided by 100.

So 10.00/(1+(17.5/100)) gives you the 'non vat' amount which you can the
subtract from the amount you paid.

This way is useless.
I'm a bit confused by people working in fractions. I was brought up on
decimals. I like to keep things simple. If you pay £10.00 total divide by
1.175, so the non vat amount is £8.51. If you have the net amount mutiply by
1.175 to get the total you pay, so £10 becomes £11.75 with vat added.

Neb

N

#### Nebulous

john boyle said:
Why not divide by 1.175?

JB has. Multiply by .175

In both cases express the VAT rate as a decimal equivalent, NOT as a
percentage.
I posted my reply to your last post before this one appeared on my server-
honest Guv!

Neb

J

#### john boyle

In message said:
I posted my reply to your last post before this one appeared on my server-
honest Guv!
You seem a decent enough cove, so I'll believe you ! just this once!

R

#### Ronald Raygun

john said:
Why not divide by 1.175?
There's a very compelling reason: You'd get the wrong answer. :-(

R

#### robin

When rate is 17.5%, you can get 7/47 from :- (17.5 / 117.5) ...
To get 7/47 from this, double 17.5 / 117.5 to get to integers:

Giving 35 / 235

Reduce by dividing each value by 5:

7/47.

easily. Well, easier than multiplying by 0.14893617!

hth

Robin

R

#### Ronald Raygun

robin said:
7/47.

easily. Well, easier than multiplying by 0.14893617!
Come off it. The nice thing about it is that you only need
six keypresses on a calculator. If you can multiply £987.65
by 7 and then divide it by 47 in your head, as opposed to with

WELL?

Not worked it out yet?

TOLD YOU SO!

T

#### Tim

To get 7/47 from this, double 17.5 / 117.5 to get to integers:

Giving 35 / 235

Reduce by dividing each value by 5:

7/47.
Why not simply divide each value by 2.5 at the start, rather than doubling
originally? You only need one stage rather than two then!