The one-division formula
When a price already includes VAT, the net is the gross divided by one plus the rate. The VAT is whatever is left over.
Net = Gross ÷ (1 + rate ÷ 100)
VAT = Gross − Net
Examples at common rates
| Gross price | Rate | Net | VAT inside |
|---|---|---|---|
| €1,210 | 21% | €1,000.00 | €210.00 |
| £600 | 20% | £500.00 | £100.00 |
| €595 | 19% | €500.00 | €95.00 |
| €107 | 7% | €100.00 | €7.00 |
Why subtracting the rate fails
Subtracting 20% from £600 gives £480 — but the true net is £500. The error happens because the percentage now applies to a bigger base. Always divide by 1.20 (or 1.21, 1.19) instead.