Charging VAT
A VAT-registered business adds VAT to what it sells and collects it for HMRC. These questions use the standard rate of 20%.
Task 1Net, VAT and gross5 questions
- Net
- the price before VAT
- VAT
- 20% of the net, at the standard rate
- Gross
- net plus VAT: what the customer pays
To find the VAT inside a gross amount at 20%, divide the gross by 6. This works because 20 out of every 120 is VAT.
Most food sold in a shop carries no VAT. Catering does, at 20%, and so does the packaging a bakery buys. These questions use those.
Task 2Output tax and input tax3 questions