Tesco: 20% off is not "VAT free"

[StealthPolarBroccoli]

In fact it is a little better than that and if you had realised you could have incorporated it into your advert

that's right, Vat free is only 16.67% less!

thank you nickel :o Have you seen the advert and ranted too, or are you just humouring me? :)

BTW I am assuming you are right as I am too lazy to figure it out

I have lots of VAT to work out in the course of my day.
VAT = x-x/1.2
there is a multiplier, but i can't rmember it 1/6, maybe? so i do it the old way (at least I know it's right)

okay, that makes no sense if you don't know what i'm on a bout.

if you have an item that's got VAT on it already, to work out the VAT portion, it's VAT = x-x/1.2

that's better.

These things are never "VAT free" anyway. They've just reduced the price

Saddo here. I worked it out to about 16.666% as well. I suppose they thought it wasn't catchy enough. As you say, they missed an opportunity there!

Well there's an argument that they're right, after all it's VAT free plus a bit more (except as Carla points out it can't be, we need to pay VAT on these things, presumably) but the implication is - it's the same price as it would be if there were no VAT on it.
Which is just wrong.

When it was 17.5% the VAT was 7/47ths of the gross. I haven't worked out 20% yet!

Do you think I should email them? Am so tempted, feeling in a very pedantic mood today

Yes you're right. VAT is 1/6th of the gross. Ex-VAT is 5/6ths of the gross.

oooh a very easy (and should have been obvious ) way of putting it
Do you want to email Tesco?

what about....

if it were VAT-free - a £10 thing would be £8.333, but £8.3333 with VAT on is £6.944444444exc VAT

no, that wouldn't work either, because 20% off £10 is £8.00.

I can't work out how they are correct!
[gaaaaah!]

how who are correct???

Oh I see
They are selling it for VAT free and a further small discount, is what I mean.
And they're just not mentioning the further small discount in their ads

ah, see.
they pre-empted you!

The only way they can be right is on an item costing about or less than 12p. E.g. VAT free would be 10p. 20% off would be 9.6p, rounded up to 10p.

uber pedant :o

No i mean while they advrtise VAT free, they are right, in that what they are charging is VAT free & then some

very good, Hocus!

SPB - sorry, i thought you meant that they mentioned the extra in their small print.

I used to work for customs and the amount of calls we used to get when anyone did a VAT free advert was hilarious.

Technically they can't say VAT free, as they are still charging VAT, and still have to declare it, and are just dropping their profit. and that's before you even get to the maths.

yes exactly!#
do they think we're idiots

VAT is easy:

gross/1.2 = Net
gross - gross/1.2 = VAT
net * 0.2 = VAT
Net * 1.2 = Gross

just stick the vat% behind the point

Or in English:

If an item is priced at £1 not including VAT

And VAT is charged at 20%

Then the item will cost £1.20

So, if the seller advertises that item as being 'VAT-free' he (or she) should be selling it at 20p less than the £1.20 'including-VAT' price.

The question is, how much is 20p as a percentage of £1.20?

This is 100x20/120

Which is 16.66%