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
 
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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.

Which leads me onto a follow up.

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).
 
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J

john boyle

Keith.F said:
Thanks Doug.

Which leads me onto a follow up.

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
 
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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

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.

One nice thing about this is that you can do it in your head quite
easily. Well, easier than multiplying by 0.14893617!

hth

Robin
 
R

Ronald Raygun

robin said:
7/47.

One nice thing about this is that you can do it in your head quite
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
the aid of pencil and paper, then I covet your head.

Your time starts NOW.


WELL?


Not worked it out yet?


TOLD YOU SO!
 
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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! :)
 
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