Question –
A product retails for £120 including vat. With the vat rate at 20%, how much of the £120 is vat?
If you answer £24 you are wrong, the correct answer is £20. With the incorrect answer, you would be calculating £24 of vat due to HMRC (i.e. 20% of £120)
To quickly calculate the VAT within the total of a sale including vat content, using the above example, simply divide the vat inclusive amount by 1.2, this will display £100 which is the amount excluding the vat content, the difference of £20 being the vat content.
Example: £120 divide by 1.2 = £100 (exc vat) minus 120 = £-20(vat content)
£250 divide by 1.2 = £208.33 (exc vat) minus 250 = £-41.67( vat content)
If you are using a cash register it is important to check that your cash till is correctly set up and calculating vat in the correct way. It is worth checking when you take your Z readings that the vat transactions are calculating correctly. If your till is incorrectly set up you could be losing money.
If vat is being used at the 20% rate simply divide the vat inclusive total for the day by 1.2, this figure should show as the vat amount taken on your reading.
Where VAT is being charged at 5% divide by 1.05
Example: £105 divide by 1.05 = £100 (exc vat) minus 105 = £-5(vat content)
The following example describes how to set up vat operation on the SAM4s ER5200 cash register
Create Tax button:
Turn the C key to the service position (ie one click clockwise past PGM position)
Now enter 70 now press SUB TOTAL button, now enter 203 press the location on keyboard to place the vat rate button ideally on a button you will never use e.g. service check button, now press CASH
SET VAT RATE IN TO MACHINE
Turn P key to P position
Enter 20.00020 PRESS TAX KEY PRESS CASH
To select product for vat
Turn key to P enter 100 press ST enter plu no press plu enter 600000000 press x/tm or qty/tm
P: Enter 20.00021 press tax shift key
For the plu’s you wish the vat content to be shown on the status is 600000000.
When finished press CASH turn key back to REG position
If you have any issues with programming vat rates on certain cash registers in the CASIO or SAM4s range we offer telephone support for a nominal fee to help you set it up – 01403 710711
