Confused over tax and VAT?

For example if a company sells £1000 worth of it's products, is the net income minus tax and VAT?

E.G. £1000 with VAT 20% leaves £800 minus another 12.5% tax = £704

So in a Profit and Loss Forcast would £1000 be the gross and £704 the net after tax or am I missing something?

Thanks.

 

vat IS value added tax
its the tax that is levied on addition of value not the net value.

if you buy stuff for 800 and sell it for 1000 then you pay vat on 200 only VAT@10% = 20$
if you are selling services and 1000 is all going to go to you, then you pay tax on 1000 vat@10%=100$

hope this clarifies it.

 

So in a P&L sheet do you just deduct VAT or also income tax?

Thanks.