# Taking Percentage Away

• Jun 3rd 2011, 06:27 AM
stuart1988
Taking Percentage Away
Hi There,

I am arguing with my boss over how to minus a percentage.

If you want to work out the VAT on £100 you divide by 1.2 and then minus the £100 which is £16.67 VAT

If i then want to pay someone 12% of that £100 my boss says u times by 0.12 which gives you £12 where as i think you divide by 1.12 and then minus the £100 which gives you £10.72

Can somebody please tell me which way is the right one

Many Thanks

Stuart
• Jun 3rd 2011, 06:39 AM
e^(i*pi)
Quote:

Originally Posted by stuart1988
Hi There,

I am arguing with my boss over how to minus a percentage.

If you want to work out the VAT on £100 you divide by 1.2 and then minus the £100 which is £16.67 VAT

Quote:

If i then want to pay someone 12% of that £100 my boss says u times by 0.12 which gives you £12 where as i think you divide by 1.12 and then minus the £100 which gives you £10.72
• Jun 3rd 2011, 06:42 AM
stuart1988
ok this is where i do not understand vat is taking off 20% of a figure u divide so why multiply when taking 12%? its just a different percentage
• Jun 3rd 2011, 06:45 AM
e^(i*pi)
Quote:

Originally Posted by stuart1988
how can we both be correct when there are 2 different figures?

I'm quite confused by the OP, it looks like there are two different questions there. Your way of working out that VAT on the given amount (£100 inc VAT) is correct.

What does 12% have to do with VAT?
• Jun 3rd 2011, 06:50 AM
stuart1988
well what i am saying is you divide vat so why multiply something that is exactly the same its just a different percentage! VAT you want 20% of the amount and i want 12% of the amount so why not divide by 1.12 rather than 1.2
• Jun 3rd 2011, 01:23 PM
e^(i*pi)
You multiply for the 12% because you want to find 12% of £100. If your £100 was including the 12% then you would indeed divide by 1.12

You divide for VAT because the £100 figure already includes VAT. If your £100 was before the addition of VAT then you'd multiply