Practise adding 20% VAT, removing VAT from gross prices and working with the 5% reduced rate.
Home energy costs £200 before VAT. What is the price including the 5% reduced rate?
Value Added Tax (VAT) is charged on most UK goods and services at 20%, with a reduced rate of 5% on things like home energy and children's car seats. In practice you need to be able to add VAT to a net price, remove VAT from a gross price, and identify the VAT element of an amount. This drill generates realistic UK prices at both the standard and reduced rates and tests all three calculation types. Essential for anyone running a business, doing bookkeeping, or simply checking a supplier invoice.
Multiply the net price by 1.20. Example: £250 × 1.20 = £300 (£50 VAT).
Divide the gross price by 1.20. Example: £300 ÷ 1.20 = £250 (the VAT was £50).
The reduced rate is 5%, applied to items like domestic fuel and power, children's car seats and some renovations.
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