Net or gross

[tinyjo]

This is really bugging me at the moment, because I'm working on finance interfaces and everyone seems to have a different answer. As far as I can tell on the net, I'm right, but I thought I'd see what you lot think.

[Poll #84843]

In this case, the specific tax in question is VAT.

Update: looking through some computer mags in the kitchen while making tea shows that actually, it's so unclear that no-one uses it for VAT - they all say inc VAT or exc VAT.

Comments

Confused

[smithi1.livejournal.com]

So are we, apparently :)

I always think that net as a term goes with gross. So I always tend to view it as the lower of the two.

dictionary.com (eventually) came up with:

Remaining after all deductions have been made, as for expenses: net profit.

Re: Confused

[tinyjo.livejournal.com]

Net does go with gross, and when you're thinking of deductive taxes then it is the lower of the two - e.g. you have your gross wages before income tax etc and your net wages after. But what I didn't think was clear from that definition was what happened with additive taxes like VAT. Does the net bit mean the lower of the two figures (i.e. not including VAT) or the figure including all tax?

[swisstone.livejournal.com]

What he said - so VAT that had to be paid on goods sold would not be included in, for instance, net takings from selling said goods.

[tinyjo.livejournal.com]

It's a perspective confusion as well, because I'm looking at it from the point of view of someone buying a service. I would have thought that the gross price would be the price before VAT and the net price the price after VAT (even though that's more), but the guy at the client end seems to think it's the other way around.

[swisstone.livejournal.com]

I think the net cost to the customer probably is after VAT is paid, because it's what he'll end up paying. I don't think you'd describe the cost before additives as gross - that would be "basic" cost, I think. But as you say, it's a grey area (I had a feeling this is what you were talking about).