19-01-2018 07:03 AM
When leaving ee early, it says that that you will need to pay the monthly fee for each month outstanding minus vat.
On the forum I constantly see that peopel are saying the monthly fee minus vat @ 16.7% yet we pay 20% so surely it should be the monthly fee minus 20% vat
Can someone confirm this
19-01-2018 07:16 AM - edited 19-01-2018 07:20 AM
It’s down to the way it’s calculated.
It’s not just your current monthly payment -20% as that isn’t the same as your monthly payment excluding VAT.
You pay £20 per month. That is £16.67 + 20% VAT (VAT = £3.33) = £20.00 (rounded)
Just subtracting 20% off the total £20 (i.e. to give a figure of £16.00) isn’t the correct way to calculate VAT as £16 + 20% then would only come to £19.20 and not £20.00.
19-01-2018 07:24 AM - edited 19-01-2018 07:31 AM
I know how to calculate the vat, it was just what has been said on here by users
my bill before vat is £47.82 (was previously £44.99) so I wanted to make sure that they weren't going to try charging more for leaving early
you can also use the value 1.2 to determine vat
ie: £47.82 * 1.2 = £57.38 = inc vat
£57.38 / 1.2 = £47.82 = ex vat
19-01-2018 07:44 AM - edited 19-01-2018 07:46 AM
Dividing the total by 1.2 is the roughly the same thing as subtracting 16.7%.
That’s why people quote the 16.7% figure.
EE will always give you the exact figure though as it’s pro-rated to daily usage.
19-01-2018 12:47 PM
VAT is legislated as 20% of the Net Price to arrive at the Gross Price, i.e. the price you actually pay.
So working backwards from the price you pay the Net Price is 83.3% (or 5/6) of the Gross Price & the VAT contained within it is 16.7% (or 1/6) of the Gross Price.
As you say you can also use divide by 1.2 to determine the Net Price.