# New to Accountancy - Help with deducting VAT please :)

Quirkydamsel
Registered Posts:

**9**
Hello there

I'm relatively new to accountancy and would like help with deducting VAT please.

Apologies if this is a silly question.

Thanks

I'm relatively new to accountancy and would like help with deducting VAT please.

Apologies if this is a silly question.

Thanks

## Comments

320Though I generally prefer using divide by 1.2 (assuming this to be 120% of the net) as it's easier to relate when the tax rate is something other than 20% like when it was 17.5% a few years ago as dividing by six will no longer work, while dividing by 1.175 will.

Divide by 1.2 e.g. 120 / 1.2 = 100 so 120 gross - 100 net = 20 vat. Obviously the divide by six rule is much easier when stuck without a calculator, but generally and in an exam you will have one.

9Is there an easier method that can just be applied for each sum?

218Eg £7.20 / 120 x 100 = £6.

I'd really recommend getting back to some GCSE maths level percentages, it's going to come up a fair bit in AAT as you progress and it will help your learning so much. I've seen references to YouTube videos on percentages which may be worth checking out, or get someone to explain it who understands it well. It does click eventually and becomes automatic as you practice, and you will get lots of percentages to practice!

9I've been absent from my accountancy studies for several months, but I'm now returning. I'm still struggling with deducting VAT and hoped that someone can give me some help please.

I don't understand the method of dividing by 6 and neither the 120% bit either.

This is proving difficult as it's used frequently through the topics. I'm doing level 2 and have returned to the beginning and practiced the discounts and vat assessment yesterday.

Once I can accept the method, I'm good with calculations, it's just having it explained in simple terms.

Sorry guys, but thank you.

320It could also be seen as 100% of net price, and 120% of the net price.

So dividing the 120% net price by 6 would give you the 20% VAT

It could also be seen as a fraction 20/120, 10/60, 1/6th

11Example

£120 ÷ 1.2 = £100

I hope the helps