formula for deducting 2.5% at till

DMC75_2

We work in small shop and would like a formula for deducting 2.5% at the till , in time we will reticket but in mean time.

Thanks

f1charlie

http://garden4less.co.uk/calculating-prices-with-new-vat-rate.asp

KEM

You need to divide the old selling price by 117.5 and multiply by 115. This can be simplified slightly to: divide the old selling price by 47 and multiply by 46.

You can check that it works by looking at something that costs £100 before VAT. After VAT at the old rate it costs £117.50. Divide that by 117.50 and then multiply by 115 gives £115. Or divide by 47 and multiply by 46 still gives £115.

Hope that helps.

peter_the_piper

Darn glad I'm below the vat threshold.

Leopard

If you wish simply to deduct 2.5% from a number (which is what you ask) then multiply it by 0.975.

For example, 100 x 0.975 = 97.5



If, however, you are trying to reduce the VAT on something from 17.5% to 15% (which is not what you ask but is perhaps why you are asking it) it's not so straightforward and you have to be careful. Because deducting 2.5% from a number to which 17.5% has been added does not give you that original number plus 15%.

Consider.

£100 + 15% = £115

£100 + 17.5% = £117.50

But £117.5 - 2.5% = £114.56 (not £115 ).


To reduce the VAT on an item from 17.5% to 15%, you have to multiply it by 0.9787233 :eek:
Proof: £117.5 x 0.9787233 = £115 (well, actually £114.99998)


Alternatively, you could divide it by 1.0217392

Proof: £117.5 / 1.0217392 = £115 (well, actually £114.99999)


And anyone dealing in really huge sums of money will need to use even more decimal places than that.


Accountants all over the United Kingdom must be rubbing their hands with glee at the prospect of how much money (with or without VAT) they are going to make sorting that one out. :beer: :money:

[Deleted User]

If you want to quickly work out the new price then simply multiply the existing price by 0.978723

Easy peasy! I multiply by decimals all day long! :rolleyes:

John_Gray

Since the 2.5% reduction in VAT corresponds to a 2.12766% reduction in the original price, then you could also multiply the original amount by 0.9787234 (but I agree that multiplying by 46 and dividing by 47 may be rather easier!)...

Leopard

John_Gray wrote: »

Since the 2.5% reduction in VAT corresponds to a 2.12766% reduction in the original price, then you could also multiply the original amount by 0.9787234 (but I agree that multiplying by 46 and dividing by 47 may be rather easier!)...

For many, it is easier to store 0.9787233 (or 1.0217392) as a constant in their calculator, rather than perform two calculations every time.