Grossed-up Tax

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1. 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. 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?

3. 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. 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

5. 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
 (F)ile (E)dit (V)iew (I)nsert (O)ptions (T)ools (D)ata (W)indow (H)elp (A)bout
 C3C4C5C6 =

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PLEASE DO NOT QUOTE THIS TABLE IMAGE ON SAME PAGE!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!

6. 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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