BBC - Key Skills - Application of Number, Levels 2 and 3

A third way is to work out the VAT is by using proportion. You can do this with or without a calculator if you like.

First, find 10% (a tenth) by dividing by 10 - moving the figures one place to the right of the decimal point. Note the number down.

Then halve that answer to find 5% - again, note it down.

Then halve that answer to find 2.5%. You know what to do by now...

Finally, adding those three amounts together — 10% + 5% + 2.5% - gives you 17.5%.

Add this to the excluding VAT price to get the including VAT total.

Here’s an example:

Your mobile phone costs £59.57 ex VAT.

10% of£59.57 is £5.957. You can work this out by dividing £59.57 by 10

5% of £59.57 is £2.978. You can work this out by dividing £5.957 by 2

2.5% of £59.57 is £1.489. You can work this out by dividing £2.978 by 2

The VAT is:
£5.957+ £2.978+ £1.489= £10.424
Round this to 2 decimal places to get £10.42.

Adding this to the original price of £59.57 gives you £69.99.

Now it’s your turn:

Grab a pen and a piece of paper to note down your answers. You can use a calculator if you find it tricky.

The scanner you want costs £127 excluding VAT.

Using the proportion method, find the price including VAT. When you’ve finished, click ’check’.

Go to the next screen to work out the VAT
exclusive price.