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This VAT calculator is simple instructions on calculating VAT. Calculating VAT is very simple!

Calculate VAT as follows:

  • VAT on the value of goods and services supplied to your customers ('outputs') -

    Say value before VAT is £100.00 and that this is fully vatable at standard rate of 20%, to arrive at value inclusive of VAT you multiply £100 by 1.20 (or 20%), giving sum of £120.00 The VAT element, known as "Output VAT" is £20.00 (£120.00 - £100) and the value inclusive of VAT is £120.00

    You should invoice the customer for £120.00 showing, value before VAT (£100.00), VAT element at 20% (standard rate) £20.00 and the gross amount due of £120.00

  • Where VAT element is included in goods and services consumed ('Inputs') but VAT element is not seperately shown on invoice ('Invoice is inclusive of VAT') -

    To calculate VAT element and value before VAT, multiply the value by 20.00 and divide the result by 120.00 For example:

    If sum including VAT is £120.00, to calculate VAT element included, multiply £120.00 by 20 (product = £2,400.00), now divide £2,400.00 by 120.00, giving VAT element of £20.00. Hence, value of goods and services before VAT is £100.00 (£120.00 - £20.00).

Note: you can only recover VAT where you have received a 'proper VAT invoice'. That is, an invoice that complies with the following basic requirements:

1. Valid VAT registration number of supplier is stated
2. The invoice is dated (referred to as the tax point)
3. Address of supplier is stated
4. Details of goods / service supplied is given
5. Your name (or company name) and address, as the person who has received goods / service, is stated

These are the main requirements, however, VAT on petrol receipts can be reclaimed even though your name, or company name is not included. This is case for many similar type receipts, but VAT can still be recovered, providing the other requirements (1, 2, 3, and 4 above) are met.

VAT calculation, as described above relates to goods and services that are fully vatable. Calculating VAT where the supplier is partially exempt is more complicated and requires agreement from HM Custom & Excise as to the formula to applied in calculating the amount of VAT that is recoverable.

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For a free initial consultation contact today


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