"I know i should be earning £560 & the tax should be £140 & the total should be £700 but i just will not come out like this, why?"
...if you were applying 20% to £700 you would add £140 but to calculate what VAT has been paid on £700 you can't simply think "well 20% of £700 is £140 so I'll deduct that from the £700 total"
...if you deduct £140 from £700 you are left with £560.
20% of £560 = £112 VAT (not £140)
£560 + £112 VAT = £672 (not £700)

Hi,
I originally started this topic a while back because I was experiencing the same problem... the software was actually functioning correctly.
If you add 20% to 100 you get 120.
If you deduct 20 from 100 you get 80.
Logically you would think that when you invoice someone for a total of £100 the invoice would simply show £80 + £20 VAT
I know it sounds ridiculous but... that calculation is not correct!
The reason for that is because if you add 20% to £80 the figure you apply would not be 20 (because £80 is a smaller figure than £100).
20% of £80 is actually only £16!
Here's a link to an online VAT calculator where you can play around with applying and deducting VAT from any figure you choose:
http://www.vatcalculator.co.uk/
If you try adding 20% VAT to £80 you will get £96 (£16 VAT = 20% of £80).
If you try adding 20% VAT to £100 you will get £120 (£20 VAT = 20% of £100).
If you try deducting 20% VAT from £100 the 'pre' VAT amount will actually be £83.33 because 20% of £83.33 is £16.67 (and £83.33 + £16.67 = £100).
Hope this is of help!

ooops!
Okay... I've realised what an idiot I am!
20% added to £100 is £120 but 20% added to £80 (20% deducted from £100) is not £20 it's actually £16
So... I've found out I'm an idiot and that my pre VAT sale prices are higher than I thought all in one morning!
Thanks again for your help!

Hi,
I'm quite desperate to find a solution for this as I have to reissue nearly 60 invoices today that were all calculating the VAT at only 16.66% instead of the 20% that I thought was being calculated (my school boy error!).
Sorry to sound dumb but where is this 16.66% coming from and what is it? Surely 20% of 100 is 20 not 16.66?
I've gone back to the preferences and have selected the option that states "Item prices are tax inclusive (presumed to already include tax)" which I'm assuming is the correct thing to do but even though the VAT amount is set to 20% it's still calculating the VAT at 16.66%.
I've been through all the options one by one and having the "Item prices are tax inclusive (presumed to already include tax)" option selected is the only way I can seem to get the total price to state what the customer has paid - the VAT amount that is being calculated howerver is not 20%?

Hi Again!
Hope you don't mind but I've now got another VAT calculation problem that I can't seem to work out!
I'm sure it's very basic...
All of the items that I sell are priced to include VAT already - If I create an invoice for an item that I've sold for £100 that is inclusive of 20% VAT how do I get it to calculate the VAT paid from the sale price and display that amount on the invoice for the customer ie. £80 + 20% VAT = £100?
At the moment when I put in the final sale price of £100 the invoice is adding another 20% VAT making the total £120?
Many thanks again!

Hi,
Many thanks for your answer and also for getting back to me so quickly... I've just gone to the settings and the box was ticked - I've just created a new invoice and the VAT amount is now calculated how I wanted it to be!
Thank you very, very much!!

Hi,
I recently installed 'Express Invoice' and have paid the basic amount after the time trial ended.
I've just noticed today that although all of my settings appear to be set to calculate the VAT at the UK 20% the actual figure that is being calculated by the software is 16.66%
I've double checked all of my previous invoices that I've sent to clients and... they are all incorrect!
I've gone to the prefernces and checked everything and it all appears correct - I've even tried adding a new VAT standard at 20% and it still won't calculate the VAT correctly.
...any ideas?
Any help would be greatly appreciated!