How to work out VAT at 20 per cent

Sharing buttons:

hi my name's Patrick McCarthy a math

tutor from London today I'm going to

teach you some math in this video I'm

going to show you how to calculate be 18

now currently in the UK dat is 20% it

changes from time to time but at the

moment is 20% so what does that mean

whenever you sell something or you buy

something you buy you buy the costs that

you buy the good and that's that the

cost of that is excluding dat and then

you add on v80 to calculate the overall

cost you're going to pay the the

retailer so let's say I wanted to buy a

new television for instance and the TV

was let's say 1,000 pounds okay

1,000 pounds excluding v80 okay

excluding the 80 that means that I've

actually got to pay a thousand pound for

the TV but then the 20% v80 is going to

go to the government so that's the

value-added tax that goes to the

government so the moment we work on 20%

so what I have to do is increase this

value by 20% so to do that the simple

way is you take your original value

let's say original value and you

multiply currently by 1.2 it really is

as simple as that

so you take this you multiply by 1.2 and

you're going to get 1,200 pounds that's

including v80 so that is how to

calculate v80 at 20% know what what all

I've done is multiplied by 1 point -

there's a reason for that and I'll just

show you the reason that's the easy way

just from all - I won't go - but the

reason is this you take your ass out you

take your thousand pounds and then you

have to add on 20% so 20% is like that

20% 20 over 100 of a thousand pounds

so if you add on a thousand plus 20% of

a thousand at this point here this pot

here goes as value-added tax this point

it is that's what the value of the good

is so this is 1,000 lots of one plus

naught point to when you factorize it

this is 1000 times 1.2 it's 1200 and

that's the reason that you only multiply

by 1 point 2 but the simple thing to do

is just multiply by 1.2 and that's how

to calculate dat