Aug 302007
The VAT fraction of 7/47, is arrived at by converting the decimal fraction of 0.175/1.175 (see the post on Calculating the VAT) to the lowest whole numbers.
7/47 is only the VAT fraction for standard VAT at 17.5%
If VAT is at 5%, the VAT fraction would become 1/21 (which is just the whole number equivalent of the decimal fraction 0.05/1.05)
If all this sounds too much like school-room maths, don’t worry, just trust me!
6 Responses to “The VAT Fraction”
Comments (6)
help !!!
What is the new fraction for VAT at 15%
The new VAT fraction is 3/23.
How is the fraction of 7/47 derived ? How could I work it out from scratch ? I know it works but I cannot see the logic and it’s driving me mad !
What is the 2011 fraction for the 20% rate ?
Thanks.
If you think about it, the VAT fraction fits into this equation:
VAT fraction = VAT amount/Gross
Assume that the gross is £117.50 and the VAT is £17.50,
then the equation would be:
VAT fraction = 17.5/117.50
Put the above into fractions:
VAT fraction = 7/40 divided by 47/40 = 7/40 x 40/47
reduce it to it’s lowest terms (by cancelling the 40 from top & bottom)
Therefore VAT fraction = 7/40
The VAT fraction for 20% will be 1/6 and can be deduced following a similar method.
Hi
what will the fraction be for value excl 20% vat.
ie when it was 17.5% is was 40/47,so what will it be for 20%
Thanks
Yvonne
It will be 1/6 if you are trying to find the VAT element (or 5/6 if you are trying to find the net amount)