VAT Calculation
How we calculate VAT on the products in your basket and at the checkout.
The price shown in the basket includes VAT. According to HMRC Guidance there are 2 ways to calculate VAT:
1) Total of the order + 20%
2) Total of the product + 20%
Our e-commerce platform uses method 2, so the way that VAT is calculated on an order is as below.
For example, where a product costs £19.99 (excluding VAT) -
Exc VAT price = £19.99
VAT paid = £4.00
Quantity = 100
£19.99 x 100 = £1,990
£4.00 x 100 = £400
£1,990 + £400 = £2,390
Hopefully that explanation makes sense, we do have a very detailed guide on how VAT is calculated which goes into the specifics of HMRC’s guidelines which you can request from us.
If there is anything else we can help with regarding this matter or if you have any further questions, please contact us.