Hi,
I might be understanding the maths here wrongly - can you explain to me why does the VAT calculation on the invoice amount comes at 16.6% and not 20% when I use the option "VAT included in price"?
For example, if the amount I charged was £500 - the VAT should be calculated as £100 and final amount earned would be £400, instead, the VAT is calculated as £83 ...etc
Can you please explain what am I doing wrong.
Hello Zofija,
VAT is 20% of the price before the VAT is added. So if the price before VAT is £100 then the VAT is £20 and the total price would be £120.
In your example, the price before VAT is £416.67. 20% of £416.67 is £83.33, so the total price including VAT is £416.67 + £83.33 = £500.00
Regards,
