Help please!

Options
AM02
AM02 Registered Posts: 7 New contributor 🐸
in Indirect Tax
A business sells reduced rated goods to a customer for the VAT exclusive amount of £900 and offers a discount of 2.5% for payment within 10 days. The customer pays within these terms. What is the VAT on the sale to be declared to HMRC?. Enter value up to two decimal places.
The correct answer is £43.87 but icannot understand how this has been worked out. Can anyone help please?

Comments

  • PeterC
    PeterC Registered, Tutor Posts: 245 Dedicated contributor 🦉
    Options
    £900 - 2.5% = £877.50
    £877.50 x 5% VAT = £43.87
  • AM02
    AM02 Registered Posts: 7 New contributor 🐸
    Options
    Thank you. I missed the reduced rate percentage part in my calculations.
  • PeterC
    PeterC Registered, Tutor Posts: 245 Dedicated contributor 🦉
    Options
    You're welcome

Categories

Privacy Policy