UK VAT Calculator
Add UK VAT to a net price or reverse-calculate the net and VAT from a gross figure. Enter an amount and choose the 20% standard rate, 5% reduced rate or a custom rate — figures update instantly.
Enter a positive amount in pounds.
How it works
Value Added Tax (VAT) in the UK is a consumption tax collected by VAT-registered businesses on behalf of HMRC. The standard rate is 20%, applied to most goods and services. A reduced rate of 5%covers items like domestic gas and electricity, children's car seats and certain energy-saving materials. Some categories — most food, children's clothes and books — are zero-rated, meaning they are still VAT-taxable but at 0%.
To add VAT to a net price, multiply by (1 + rate). A £100 net price at 20% VAT becomes £120 gross. To remove VAT and find the net figure from a gross total, divide by (1 + rate). £120 gross at 20% gives you £100 net and £20 VAT.
How to remove VAT from a gross price
This is the step people most often get wrong. To strip 20% VAT out of a gross price, you divide by 1.2 — you do not subtract 20% of the gross amount. A £120 gross price divided by 1.2 gives the correct answer: £100 net and £20 VAT. Subtracting 20% of £120 instead would wrongly give £96, understating the net figure by £4. This kind of reverse-VAT calculation is exactly what bookkeepers need when an invoice or receipt only shows the VAT-inclusive total and the net and VAT elements have to be worked out afterwards.
Businesses whose taxable turnover exceeds the VAT registration threshold (£90,000.00 in a rolling 12-month period) must register with HMRC and start charging VAT on their invoices. They then reclaim the VAT they pay on business purchases (input tax) and pay HMRC the difference between output tax charged and input tax reclaimed.
Under Making Tax Digital, most VAT-registered businesses must file returns and keep records digitally. This calculator is a quick way to double-check invoice figures — always cross-reference the totals in your accounting software before submitting a return.
Worked example
- Adding VAT: £100 net at 20% VAT → £20 VAT, £120 gross.
- Removing VAT: £120 gross with 20% VAT removed → £120 ÷ 1.2 = £100 net, and £120 − £100 = £20 VAT.
- Removing the reduced rate: £105 gross with 5% VAT removed → £105 ÷ 1.05 = £100 net, and £105 − £100 = £5 VAT.
Notice the £120 example: wrongly subtracting 20% of £120 (£24) would give a net of £96 — £4 too low. Dividing by 1.2 is the only correct method for reverse VAT.
Limitations of this calculator
- Does not handle mixed baskets with several VAT rates in one transaction — calculate each rate separately.
- Does not apply VAT schemes such as Flat Rate, Margin or Cash Accounting.
- Does not account for VAT on imports, EU distance selling or reverse-charge transactions.
- Rounding on individual invoice lines may differ slightly from HMRC's own line-by-line rounding rules.
Frequently asked questions
What is the standard UK VAT rate?
20%. This applies to most goods and services sold in the UK.
When does the 5% reduced rate apply?
The 5% rate applies to items like domestic energy, children's car seats and some energy-saving home improvements.
How do I remove VAT from a gross price?
Divide the gross figure by 1.20 (for 20%) or 1.05 (for 5%) — never simply subtract the percentage from the gross, as that overstates the VAT. Switch this calculator to 'Remove VAT' and it does the division for you.
Do I need to register for VAT?
You must register once your taxable turnover in a rolling 12-month period exceeds £90,000.00. Voluntary registration below the threshold is common when most of your customers are themselves VAT-registered.
Are any goods zero-rated?
Yes — most food, books, children's clothes and public transport are zero-rated. Zero-rated is still VATable (at 0%) and different from VAT-exempt items like insurance.
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Official sources
Figures on this page follow official UK government guidance. Rates last verified: 27 August 2026. See our data sources and calculation methodology.
Estimates for general guidance only — not personalised financial advice.