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VATPosted by : November 25, 2022 admin
VAT in the UK is currently 20%.
In most shops you go to, or visit online, the prices shown will already include VAT, so the price displayed will be the price you pay at checkout.
Sometimes however, you will see that the price displayed is shown ‘ex VAT’; this means you need to add 20% onto the price shown to find out the total cost you will pay at checkout.
In the example below, we will look at the simplest way to find this price with a calculator:
20% is entered into your calculator as 0.2
A new laptop costs £800 (ex VAT).
800 x 0.2 = 160
This means that the VAT is £160, and we need to add this onto the amount of the laptop price shown.
£800 + £160 = £960
So the total price, including VAT is £960.
Calculating the cost before VAT however, is slightly different. To remove VAT from a price, you simply divide the amount by 1.2.
So using the same examples above, if the laptop price is displayed as £960 (inc VAT), to calculate the cost before VAT you would enter
960 / 1.2 = 800