How to Find the Original Price Before VAT Was Added

Updated Jul 28, 2026 · View standard page

Suppose a bill comes to £144 including 20% VAT. The common mistake is to subtract 20% of £144. That would remove too much, because £144 is already the increased amount.

original × 1.20 = 144

So divide by 1.20:

original = 144 ÷ 1.20 = 120

The original price was £120.

Why dividing works

A 20% increase means the final amount is 120% of the original, which is the same as 1.20 times the original. To undo multiplication by 1.20, divide by 1.20.

Quick check: 20% of £120 is £24, and £120 + £24 = £144.

When this method appears

You can use the same structure for discounts, service charges and markups. First work out what percentage the final amount represents, then turn that into a multiplier.