Calculating Vat backwards

Homeandhardware — Sun, 21 Sep 2025 11:50:26 GMT

Hi, I have had an issue with a VAT receipt from our customer. Our items are set up as VAT included, but when you look at the receipt, it has the overall price minus the 20%. For example,

£3.00 + Vat would be £3.60. Receipt states £3.00 (inc Vat =£0.60). Which is incorrect.

I googled how to calculate the vat backwards and the calculation is £3.00 divided by (100+20(Vat rate)) multiplied by 100, or to make it even easier divide your full price by 6 to get the vat element. Which comes out to £2.50 (+20% = £3.00). Therefore, the vat element of this would be £0.50 and not £0.60.

Has anyone else had similar issues with this.....??

TIA

Re: Calculating Vat backwards

tranguyen — Thu, 29 Apr 2021 10:58:09 GMT

Hey @Homeandhardware, thank you for sharing this!

I haven't come across this myself but I want to make sure this is looked into. Before we dive in, there are a couple of things I want to check:

At the moments, the tax is set to be Include Tax in Item Price, is that correct? You can always check this on your Square Dashboard > Items > Sale taxes.
The price entered into Square are the price with tax included
Was there any discount applied?

I did a quick test transaction with 20% tax included and this is the breakdown I get, which is correct. If you have a screenshot (without any sensitive information) showing the tax breakdown on the receipt you can share with me, that'll help me to investigate it as well!

thread Re: Calculating Vat backwards in Payments Troubleshooting

Calculating Vat backwards

Re: Calculating Vat backwards