Worked example 1
A laptop costs £450 before VAT at 20%. What is the price including VAT?
- £450 × 1.2
Answer: £540
Maths for adults · Everyday numeracy
VAT, sales tax and discount calculations
Useful for shopping, invoicing and small-business admin. UK VAT is used for the examples; the same method works for US sales tax, Australian GST and Canadian GST/HST.
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How it works
To add tax, multiply by (1 + rate). At 20% VAT, multiply by 1.2.
To remove tax from a price that includes it, divide by (1 + rate) — do not subtract 20%. £120 including VAT ÷ 1.2 = £100.
A discount of d% means you pay (100 − d)%. 30% off means multiply by 0.7.
Worked example 2
An invoice total is £96 including 20% VAT. What was the price before VAT?
- £96 ÷ 1.2 = £80
- Check: £80 × 1.2 = £96
Answer: £80
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Practice sheet
Everyday numeracy · Standard
VAT, sales tax and discounts
NameDate
Give money answers to the nearest penny.
- 1.£80 + 20% VAT =
- 2.£155 with 35% off. Sale price?
- 3.£215 + 20% VAT =
- 4.£120 with 30% off. Sale price?
- 5.£95 with 30% off. Sale price?
- 6.£225 + 20% VAT =
- 7.£185 with 40% off. Sale price?
- 8.£200 with 30% off. Sale price?
- 9.£15 with 35% off. Sale price?
- 10.£195 + 20% VAT =
- 11.£150 + 20% VAT =
- 12.£170 with 30% off. Sale price?
Answers and explanations
- £80 + 20% VAT =£96.00£80 × 1.2 = £96.00.
- £155 with 35% off. Sale price?£100.75£155 × 0.65 = £100.75.
- £215 + 20% VAT =£258.00£215 × 1.2 = £258.00.
- £120 with 30% off. Sale price?£84.00£120 × 0.7 = £84.00.
- £95 with 30% off. Sale price?£66.50£95 × 0.7 = £66.50.
- £225 + 20% VAT =£270.00£225 × 1.2 = £270.00.
- £185 with 40% off. Sale price?£111.00£185 × 0.6 = £111.00.
- £200 with 30% off. Sale price?£140.00£200 × 0.7 = £140.00.
- £15 with 35% off. Sale price?£9.75£15 × 0.65 = £9.75.
- £195 + 20% VAT =£234.00£195 × 1.2 = £234.00.
- £150 + 20% VAT =£180.00£150 × 1.2 = £180.00.
- £170 with 30% off. Sale price?£119.00£170 × 0.7 = £119.00.
Last reviewed: 25 September 2026