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

What happens if you need to remove the VAT from the VAT inclusive price?

Back to the PCs:

On the one website, it cost £1695 excluding VAT. The other had the same computer for £1995 including VAT.

Here’s how to work out the ex VAT price of the second PC:

Price inc. VAT = 100% + 17.5%

Therefore:
Price inc. VAT = 117.5%

To get the ex VAT price, you need to work out 100%.

First find 1% of £1995

To find 100%, multiply this answer by 100.

You could work this out on a calculator by entering the following:

1995 ÷ 117.5 = 16.9787
16.9787 x 100 = 1697.87

You can check this answer by multiplying £1697.87 by 1.175 and you should get the VAT inclusive price.

You can round this up to £1995

Now you have a go:

You’ve found a cheaper computer, advertised at £989 including VAT. What is the ex VAT price? When you’ve finished, click ’check’.

That is the end of the module on working out VAT. You have covered the following curriculum objectives:

Carry out calculations involving two or more steps with numbers of any size (Level 2)
Work with and convert between fractions, decimals and percentages (Level 2)
Show your methods clearly (Level 3)
Work out proportional change (Level 3)

The basic skills you have covered in this assignment are:

N1/L2/2 Carry out calculations with numbers of any size using efficient methods
N1/L2/4 Evaluate expressions and make substitutions in given formulae in words and symbols to produce results
N2/L2/6 Add, subtract, multiply and divide decimals up to three places
N2/L2/8 Find percentage parts of quantities and measurements