Meal Deal - How is the VAT calculated?

Meal Deal - How is the VAT calculated?

The VAT on a meal-deal is calculated as follows:-

 
Sandwich £2.00

Crisps - £0.75

Drink - £1.00

 

Giving a total of  £3.75

The meal deal kicks in and discounts the transaction to £3.00

 

What the system does is splits the £0.75 discount across the three items according to the percentage of the value of each component.

 

Sandwich - 53.33% - dicount £0.40

Crisps - 20% - discount £0.15

Drink - £26.67% - discount £0.20

 

So the items are reduced as follows:-

 

Sandwich is reduced by £0.40 to £1.60

Crisps is reduced by £0.15 to £0.60

Drink is reduced by £0.20 to £0.80

 

The vat is then calculated based on these sales values according to the VAT rate set against each individual component.