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How is the VAT saved through accurate accounting figure calculated?
How is the VAT saved through accurate accounting figure calculated?

How the VAT saved figure is calculated on the Analytics Overview page. Written by Daniel Little
Updated over a week ago

VAT saved is the total of the VAT you have saved because Link My Books has separated your revenue correctly by tax rate.

Example:

£1,000 sales at 20% VAT
£1,000 sales at 5% VAT
£1,000 sales at 0% VAT
£1,000 sales No VAT

First, you need to work out what the VAT amount would have been if all the revenue was treated as 20% VAT.

To do that take a sum of all revenue, then divide that figure by 120 then multiply by 20.

That gives you the 20% VAT figure.

In this example that would give us £4,000 / 120 * 20 = £666.67

Then work out the actual VAT Link My Books accounted for by separating the revenue correctly.

In this example, the actual VAT is:

£1,000 sales at 20% VAT = 1,000 / 120 * 20 = 166.67
​£1,000 sales at 5% VAT = 1,000 / 105 * 5 = 47.62
£1,000 sales at 0% VAT = 0
£1,000 sales No VAT = 0

So the total actual VAT is: 166.67 + 47.62 = £214.29

Therefore the total VAT saved is £666.67 - £214.29 = £452.38