Graham1030 Posted February 27, 2020 Share Posted February 27, 2020 Hi, I am in the UK and have set my VAT tax to 20%. But when i view my tax figures it doesn't work out to 20%. The example in the picture i have attached works out to about 16%, am i doing something wrong here? It's really confusing me, surely if it is working out 20% tax then the figures in the picture should work out to be 20% Link to comment Share on other sites More sharing options...
Amirah Posted February 28, 2020 Share Posted February 28, 2020 Hello, Perhaps you are using an "included to the price tax"? in this case the calculations can be different as follows: ----------- In the case of ‘included in the price’ tax, the item price consists of pre-tax price value plus the tax value. Price = PretaxPrice + Tax And the tax will be applied to the pre-tax price. To calculate the item's pre-tax price, divide the price by 1 + the tax rate in decimal form. To find the value of the tax that is included in the item’s price, you have to subtract the pre-tax price from the item price. For example, if the tax rate is 6%, divide the item’s price by 1.06. So if the item is $20 with the ‘included in the price’ tax, then the value of the pre-tax price is 20/1.06 = $18.87 (rounded), and the value of the ‘included in the price’ tax is 20-18.87=$1.13. ----------- You can also refer to the below link for more information about how each type of taxes is calculated https://help.loyverse.com/help/how-taxes-are-calculated Link to comment Share on other sites More sharing options...
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