A VAT/GST reverse calculator helps you find the net (pre-tax) amount when you only know the gross amount.
Formula:
\(\text{Net Amount} = \frac{\text{Gross}}{1 + \frac{\text{VAT Rate}}{100}}\)So if the gross is £120 and VAT is 20%:
£120÷1.20=£100
For U.S. sales tax, the same idea applies:
Price before tax=1+Tax Rate Total
[ad_1]
Reverse VAT Calculator UK
To find the net price from a gross price including VAT in the UK:
- Standard Rate (20%)
Example: £240 gross → £240 ÷ 1.20 = £200 net
VAT portion = £240 − £200 = £40
- Reduced Rate (5%)
Example: £105 gross → £105 ÷ 1.05 = £100 net
VAT portion = £105 − £100 = £5
- Usage
- For UK VAT-registered businesses, removing VAT from total invoices
- For accounting, reporting, or pricing decisions
If needed, you can also calculate the VAT amount directly using: VAT=Gross−Net\text{VAT} = \text{Gross} – \text{Net}VAT=Gross−Net
Calculate Price Excluding VAT from Gross Amount
To calculate the price excluding VAT from a gross amount:
Formula:
\(\text{Net Price} = \frac{\text{Gross Price}}{1 + \text{VAT Rate}}\)Example:
- Gross Price = £120
- VAT Rate = 20% → 1 + 0.20 = 1.20
- VAT portion = £120 − £100 = £20
[rr_1]
Reverse Sales Tax Calculator Canada
In Canada, when you have a total (tax-inclusive) amount and want the pre-tax (net) amount, use:
Formula:
\(\text{Pre-tax Amount} = \frac{\text{Total Amount}}{1 + \text{Tax Rate}}\)Example (Ontario, 13% HST): $113÷1.13=$100 (pre-tax)\$113 ÷ 1.13 = \$100 \text{ (pre-tax)}$113÷1.13=$100 (pre-tax)
VAT Backwards Calculation for Business
The backward VAT (or reverse VAT) calculation lets you extract the net (pre-tax) price and the VAT portion from a gross (tax-inclusive) amount.
Formulas:
- Net (pre-tax) amount:
- VAT amount:
Example (UK, 20% VAT):
- Gross Amount = £120
- Net Amount = £120 ÷ 1.20 = £100
- VAT Amount = £120 − £100 = £20
[ad_2]
Difference Between Reverse VAT and Reverse Charge
| Feature | Reverse VAT | Reverse Charge |
|---|---|---|
| Definition | A situation where VAT is accounted for in the invoice in reverse; generally, VAT is not collected by the supplier. | A mechanism where the buyer, not the seller, is responsible for paying the VAT to the tax authorities. |
| Who Pays VAT | The supplier may not charge VAT, but the buyer accounts for it. | The buyer directly pays the VAT to the government instead of the supplier. |
| Purpose | Ensures VAT is collected correctly on certain goods or services, avoiding fraud. | Simplifies compliance in cross-border transactions and on certain notified goods/services. |
| Applicability | Can apply in specific scenarios like imports or certain zero-rated goods. | Common in B2B transactions, imports, and specified notified services. |
| Accounting | VAT is reflected “in reverse” on the invoice. | Buyer reports both output tax (VAT payable) and input tax (VAT credit) in their return. |
FAQs – GST/VAT Reverse Calculator
How do I calculate net price from gross with VAT included?
To find the net price from a VAT-inclusive gross amount, divide the gross price by 1 plus the VAT rate—for example, €150 ÷ 1.15 ≈ €130.43 with 15% VAT.
How can I remove VAT from a total amount?
To remove VAT from a total amount, divide the total by 1 plus the VAT rate—for example, €120 ÷ 1.2 = €100 before 20% VAT.
What’s the difference between reverse VAT and reverse charge?
Reverse VAT calculates the pre-tax price from a VAT-inclusive amount, while reverse charge shifts the VAT payment responsibility from the seller to the buyer, typically in cross-border or B2B transactions.
How to remove sales tax from a total price in Canada?
To remove sales tax in Canada, divide the total price by 1 plus the tax rate—for example, CAD 113 ÷ 1.13 ≈ CAD 100 before 13% HST.
Why is reverse VAT calculation important for small businesses?
Reverse VAT calculation is important for small businesses because it helps determine the pre-tax price of goods or services when VAT is included, ensuring accurate pricing, accounting, and compliance with tax regulations.
[ad_3]