Answer to Question #50631 in Economics for Samba Sy

Question #50631

What is the VAT amount on an item that sells for £8.50

Expert's answer

Assuming that the VAT rate is 20% we can find the VAT amount as following:
VAT amount = price / (1 + VAT rate) * VAT rate
VAT amount = 8.50 / 1.20 * 0.20 = £1.42

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