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Grossed-up Tax

This is a discussion on Grossed-up Tax within the Excel Questions forums, part of the Question Forums category; Hello, I need a formula to Gross up the value of Gift Vouchers to keep the Inland Revenue happy. It ...

  1. #1
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    Default Grossed-up Tax

    Hello,
    I need a formula to Gross up the value of Gift Vouchers to keep the Inland Revenue happy. It is for people on 40% tax or 22% tax.

    I have a formula but do not know how to translate it into Excel.
    The formula is:
    Grossed-up Tax Value = Voucher value*100/60 (40%)
    Voucher value*100/78 (22%)

    Tax VoucherValue Grossed-up Value

    40 50 formula ?

    Thanking you in anticipation,
    E Chesney-Lowe

  2. #2
    Board Regular Chitosunday's Avatar
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    Default

    What do you want , add the gross up value of people on 40% tax and 22% tax or choose one of the formula based on what criteria?
    Mr Young at Heart - Learning is like chasing the wind, it's boundless.

  3. #3
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    Default Re: Grossed-up Tax

    Hi

    If A1 = Voucher value

    B1 = A1*(100/60) for 40%

    C1 = A1*(100/78) for 22%

    Hope this helps

    Cricketer

  4. #4
    Board Regular Chitosunday's Avatar
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    Default

    Since you did not give the criteria on who will be tax at 40% and 22%, then cricketer formula will do or a simple
    For 40% tax
    =a1/.60

    For 22% tax
    =a1/.78
    Mr Young at Heart - Learning is like chasing the wind, it's boundless.

  5. #5
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    Default Re: Grossed-up Tax

    Hi Chesney-Lowe:

    Welcome to MrExcel Board!

    Unless I am missing something here, my understanding is that the VoucherPrice is before taxes price, and the GrossedUpVoucherPrice is the AfterTaxes Price. If this is the case, then you may find the following of some interest ...

    ******** ******************** ************************************************************************>
    Microsoft Excel - y030824h1.xls___Running: xl97 : OS = Windows 98
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    =

    A
    B
    C
    D
    1
    (Purchase)Tax(AfterTaxes)formula
    2
    NetPriceRateGrossPrice
    3
    5040%70=$A3*(1+$B3)
    4
    10040%140=$A4*(1+$B4)
    5
    5022%61=$A5*(1+$B5)
    6
    10022%122=$A6*(1+$B6)
    Sheet5*

    [HtmlMaker 2.20] To see the formula in the cells just click on the cells hyperlink or click the Name box
    PLEASE DO NOT QUOTE THIS TABLE IMAGE ON SAME PAGE! OTHEWISE, ERROR OF JavaScript OCCUR.


    If I have misunderstood the question -- my apologies!
    Regards!

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  6. #6
    MrExcel MVP
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    Default Re: Grossed-up Tax

    & just as another alternative...

    go to insert | name | define. define 'high_rate' as

    =0.4

    and low_rate as

    =0.22

    ...& use them in formulas of the form:

    =amount*(1+high_rate)

    or whatever. advantage of this approach is that, when rates change, you only have to update the named formula to apply the rate change globally. Admittedly, if you put the rates in a single cell, you'd only have to change the value in the cell to get the same effect, but this way the formulas are a little more transparent.

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