# Split mind - VAT

Registered Posts: 45 Regular contributor ⭐
Hi all,

me and my brother are having a discussion and ive got to the stage where im so confused i dont know which answer is right.

for example... (forget roundings)

He is saying..

182.82 - VAT at 17.5% = £150.83 on a calculator

150.83 + VAT at 17.5% = £177.21 on a calculator

Im saying..

£182.82 - VAT at 17.5% = £155.59

£155.59 + VAT at 17.5% = £182.82

Now ive given his a go on the calculator by putting in '182.82 - 17.5%' and it does equal the £150.83 so can someone give it a few minutes and work out the right suggestion, its doing my head in!!!

Marcus

• Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
150.83+VAT = £177.22
The maths is 150.83 * 1.175

182.82 minus VAT is 182.82 / 1.175 = £155.59

You cannot take the gross and minus 17.5% because the gross is 117.5%. The VAT is 17.5% of the Net, which is 100%.

If you are trying to find the VAT from the gross, do not use percentages, use 1.175 or the VAT fraction of 7/47

Obviously VAT is now 20%....
• Registered Posts: 45 Regular contributor ⭐
yes i dont know where his company are getting these figures from, and yes agreed with the 20%, this was just a one off example back in the 17.5% days
• Registered Posts: 460 Dedicated contributor 🦉
Cause the calc % function assumes you are at 100% when you use (-)%

Nice way my tutor once put it is like a Mark up.

Gross - 117.5% 182.82/117.5 = 1.555915
VAT -17.5% 1.555915* 17.5 =27.22851
Net-100% 182.82-27.22851= 155.5915 or 1.55915*100

They way your brother is calc'ing is on a Margin basis.
i.e
Gross =100% 182.82/100 to give 1% =1.8282
VAT =17.5% 1.8282 *17.5 = 31.9935
Net =82.5% 182.82-31.9935=150.8265 or 1.8282*82.5
• Registered Posts: 585 Epic contributor 🐘
Hi all,

me and my brother are having a discussion and ive got to the stage where im so confused i dont know which answer is right.

for example... (forget roundings)

He is saying..

182.82 - VAT at 17.5% = £150.83 on a calculator

150.83 + VAT at 17.5% = £177.21 on a calculator

Im saying..

£182.82 - VAT at 17.5% = £155.59

£155.59 + VAT at 17.5% = £182.82

Now ive given his a go on the calculator by putting in '182.82 - 17.5%' and it does equal the £150.83 so can someone give it a few minutes and work out the right suggestion, its doing my head in!!!

Marcus

This reminds me of a puzzle

3 friends go to a pub.

They all put in £10 each in a pot and a give it to a bar man to look after it.

at the end of outing, the total of bill came at £25

The bar man knew his customers. So that none of the friends (typical accountants) do not feen that their contribution to the pot was unfair, the bar man gave back £3 so that each friend will get back £1 each. He retained £2 as a tip.

Reconciliation

Cost to each friend ( £10 - £1) = £ 9 time 3 = £27

£27 plus £2 retained by barman as a tip = £29