For VAT its common for tax to be included in the total, then the goal is to figure out what the before-tax price was.

Scenario 1: Your total includes tax

If the total is 100, and VAT is 20%, then:

  • price + 20% = 100
  • price * 1.2 = 100
  • price = 100/1.2
  • price = 83.33
  • tax is 16.66

You can confirm with this 3rd party tax calculator: http://www.vatcalculator.co.uk/

For this scenario: enable "Inclusive" tax setting

Scenario 2: You want to add tax to your total

Alternatively, the app can add tax to the total. So if the total before tax is 100, and VAT is 20%, then:

  • total-with-tax = 100 + 20%
  • total-with-tax = 100 * 1.2
  • total-with-tax = 120
  • tax is 20

For this scenario: disable "Inclusive" tax setting

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