Want to work out VAT for yourself? Well, I’ll try to explain how it works. First I’ll explain Gross and Nett, and then we’ll have a look at the maths& vat calculator.

**Gross**: the Gross price is the price including VAT. Also called “inc VAT”.

**Nett:** the Nett price is the price excluding VAT. Also called “ex VAT” or “Net”.

## Work out your ratio ( vat calculator )

These calculations work by multiplying or dividing by a ratio (also called the VAT fraction). The first step is to figure out your ratio – so what is it? Luckily it’s very easy to work out. Take your VAT rate, divide it by 100 and then add 1. For example a rate of 20% gives you a ratio of 1.20 (that’s 20/100 = 0.2 + 1 = 1.2)

That makes it sound complicated so here’s a rule of thumb: just put “1.” in front of the VAT rate, so 20% becomes 1.20, 17.5% becomes 1.175, and 5% becomes 1.05

If you are in the UK and using a VAT rate of 20% the ratio is 1.20. If you are in Germany and your rate is 23% then the ratio is 1.23.

## Adding VAT

Adding VAT to an amount is very easy. All you need to do is multiply your Nett amount by your ratio.

For example, if you are selling a chair for £150 Nett and need to add 20% VAT to get the Gross price including VAT, you use:

150 **x** 1.20 = 180

So the Gross amount including VAT is £180.

## Removing VAT

Taking VAT off an amount is just as easy (providing you have a calculator, I’m terrible at division). All you do is divide your Gross amount by your ratio.

For example, if you bought a table for a Gross price of £180 including 20% VAT and want to work out the Nett price excluding VAT, you do this:

180 **÷** 1.20 = 150

So the Nett amount excluding VAT is £150.

## Finding the VAT amount from a Gross amount

Sometimes you have a total Gross amount and need to find the amount of VAT it contains. The simplest method is to find the Nett amount (see *Removing VAT* above) and take the Nett away from the Gross.

Going back to our example, if you bought a table for a Gross price of £180 including 20% VAT and want to find the amount of VAT included in the price, you do this:

180 **÷** 1.20 = **150**

and then

180 **–** **150** = 30

So the amount of VAT in this case is £30.