How to remove VAT from a price with VAT included?
This guide explains how to remove VAT from a final price and how to verify the result using the calculator.
How to know the price without VAT of a product
The opposite situation may also arise, where you want to remove VAT from a price. This occurs when on the price tag a price is given, but with the comment that VAT is included. Knowing the net price of the product could be a totally valid question to have.
Formula to remove VAT from a final price
This can be answered by applying the formula of:
X
=
Price with VAT
1.2
=
Result price without VAT
Example to remove the VAT of 20%
In this case the £240 of the total price of the product would be divided by 1.2. Giving the following result:
X
=
£240
1.2
=
£200
In summary, if you have a VAT of 20% these are the operations to perform:
- £200 × 0.2 = £40 (To calculate VAT on prices that don't have it)
- £200 × 1.2 = £240 (To calculate the total price with VAT included)
- £240 ÷ 1.2 = £200 (To calculate the price without VAT)