VAT

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:23AM in AAT student discussion
ive got the figure 122,000 (not including vat) how would i work out how much tax is payable?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT

    Hi<BR><BR>Sorry, do you mean you want to find out how much the total is of 122,000 + Vat, if so, x by 1.175, and take away from 122,000 to find out the vat element.<BR><BR>I'm probably on another planet at the moment and not reading your question correctly, if this is the case I apologise now, and you can just ignore me (most people do anyway!)<BR><BR>Take care!<BR><BR>Tracy<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT

    As Tracy said but to save taking away the original figure, to work out VAT on a figure do:<BR><BR>figure x 0.175<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT

    Or you can just do 122000 x 0.175 to give the VAT element.<BR><BR>If you want to know what the VAT is on 122,000 then just do 122,000 / 1.175.<BR><BR>If you want to know what 122,000 is less the VAT try this:<BR><BR>(122000 x 7) / 47<BR><BR>e.g.<BR><BR>122000 x 7 = 854,000 / 47 = 18,170.21<BR><BR>This probably isn't the best method for doing this, but it is the only way I can remember from having to do VAT returns for my last company.<BR><BR>Hope this helps.<BR><BR>Nick
  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT

    Great thanks, ive also found another way which just multiply the figure by 17.5%.<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT

    Thats the method i use as well Nick, im not sure if thats the proper way though and if the examiners will like it. I was taught another way but its so long i cant remember the steps.<BR><BR>Chris.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT

    The only problem I see with using multiply by 7 and divide 47 method is if the VAT rate was to change (it's unlikely) it's not easy to change.<BR><BR>Whereas doing it by decimal or percentage you can easily change <BR><BR>It's however odds on if you're studying accountancy you could obviously do this ;-)<BR><BR><BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT

    I agree, it is also not good if the VAT is for utilities, which in most cases is only 5%, but for the standard 17.5% it works fine with.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    VAT

    Another method for finding VAT content in Gross figure is - 17.5/117.5 x figure = VAT (17.5/117.5 x 122000 = 18170.21)<BR>Easiest method I found to add VAT to Net figure is as Matt said - figure x 0.175 (122000 x 0.175 = 21350)

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