Calculating the VAT (Value Added Tax) element of any transaction can be a confusing sum at the best of times. Following these simple steps can help you get it right:

1. Take the gross amount of any sum (items you sell or buy) – that is, the total including any VAT – and divide it by 117.5, if the VAT rate is 17.5 per cent. (If the rate is different, add 100 to the VAT percentage rate and divide by that number.)

2. Multiply the result from Step 1 by 100 to get the pre-VAT total.

3. Multiply the result from Step 1 by 17.5 to arrive at the VAT element of the bill.