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!
