Value Added Tax (VAT) is a type of consumption tax; it is similar to sales tax in the United States. VAT is charged as a percentage of the taxable item or service's price. If you are a VAT registered business, then you can claim back the VAT you have paid on business-related purchases. To claim the amount back, calculate the amount of VAT paid, or the VAT element.

Turn the VAT rate into a decimal by moving the decimal point two places to the left. For example, if the VAT rate is 17.5 per cent, then the decimal equivalent is .175.

Add 1 to the figure you calculated in Step 1. In the above example, .175 + 1 = 1.175.

Enter the amount of the item you purchased into the calculator. For example, if you purchased a chair for £100 then enter 100 into the calculator.

Press the division key on your calculator.

Enter the number you calculated in Step 2. In this example, you calculated 1.175 so: £100 / 1.175 = 85.107.

Subtract the amount in Step 5 from the total price of the item. In this example, £100 - 85.107 = £14.89. This is the VAT element for your item.

#### Tip

You can find the VAT rate on a VAT receipt (you may have to ask the retailer to provide you with one). If you don't know the VAT rate, check with your government's taxation office. For example, in the United Kingdom, Her Majesty's Revenue and Customs collects VAT and has information about the latest VAT rates.