Calculate UK Value Added Tax (VAT) to add to or extract from a price.
Results
Net Price
£100.00
VAT Amount
£20.00
Gross Price (Total)
£120.00
NetVAT
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About the VAT Calculator UK
Adding VAT is easy arithmetic. Removing it is where people go wrong, and the mistake costs money in both directions. To add 20% VAT you multiply by 1.2. To remove it you do not subtract 20% — you divide by 1.2. Those are different operations and they give different answers. Take £120 including VAT: divide by 1.2 and the net price is £100, with £20 of VAT. Subtract 20% instead and you get £96, which understates the net price by £4 and the VAT by £4. On a single invoice that is trivial; across a quarter of purchases it is the difference between a correct VAT return and one that under-reclaims. This calculator does both directions and shows the net, the VAT and the gross together, so you can see which figure you are actually looking at. It covers the standard rate of 20%, the reduced rate of 5% that applies to things like domestic fuel and children is car seats, and the zero rate that applies to most food, books and children is clothing. Zero-rated is not the same as exempt, and the difference matters if you are registered — a point the FAQs below deal with properly.
Mathematical Formula & Logic
There are two calculations and they are not inverses of the same subtraction. To add VAT to a net price, multiply the net figure by one plus the rate. At the standard rate that is net multiplied by 1.2; at the reduced rate, net multiplied by 1.05. The VAT element is the difference between the gross and the net, or equivalently the net multiplied by the rate itself. To remove VAT from a gross price — to work backwards from a price that already includes it — divide the gross figure by one plus the rate. At the standard rate that is gross divided by 1.2; at the reduced rate, gross divided by 1.05. The VAT element is then the gross minus the net. The divisor is what people forget. Dividing by 1.2 is equivalent to multiplying by 0.8333, not by 0.8, and the gap between those two is precisely the error described above. A useful shortcut for the standard rate is that the VAT in a gross figure is the gross divided by six, because 20% of the net is one sixth of the gross. £120 divided by six is £20, which matches. For the reduced rate the equivalent shortcut is dividing by 21, which is less memorable but works the same way. Rounding follows normal commercial practice: VAT is calculated to the penny and rounded to the nearest penny, and HMRC allows rounding down to the nearest penny on invoices where the calculation runs to fractions.
Step-by-Step Example
Three worked examples covering both directions and both rates.
Example 1: adding standard-rate VAT. You are quoting for work with a net value of £2,400. Multiply by 1.2 to get a gross of £2,880. The VAT element is £480, which is also £2,400 multiplied by 0.2. Your invoice shows £2,400 net, £480 VAT and £2,880 total.
Example 2: removing standard-rate VAT. You have a receipt for £354 including VAT and need the net figure for your accounts. Divide £354 by 1.2, giving £295. The VAT is £354 minus £295, which is £59. Check it with the shortcut: £354 divided by six is £59. If you had instead subtracted 20% from £354 you would have recorded £283.20 net and £70.80 of VAT — overstating your reclaimable VAT by £11.80 on this one receipt alone.
Example 3: the reduced rate. A domestic fuel bill is £262.50 including VAT at 5%. Divide by 1.05 to get a net of £250, leaving £12.50 of VAT. Note that the sixth shortcut does not work here — it only holds at the standard rate. At 5% the gross divided by 21 gives the VAT, and £262.50 divided by 21 is indeed £12.50.
Reference Data & Values
label
value
Standard rate
20% — most goods and services
Reduced rate
5% — domestic fuel and power, children is car seats, some energy-saving materials
Zero rate
0% — most food, books, newspapers, children is clothing
Add VAT at 20%
Multiply the net price by 1.2
Remove VAT at 20%
Divide the gross price by 1.2 — not subtract 20%
VAT inside a standard-rate gross price
Divide the gross by 6
Registration threshold
£90,000 of taxable turnover in any rolling 12 months
Frequently Asked Questions
Divide by 1.2 for the standard rate, or by 1.05 for the reduced rate. Do not subtract 20%, which is the most common error in VAT arithmetic and gives a different answer. On £120 including VAT, dividing by 1.2 gives £100 net and £20 VAT, which is correct. Subtracting 20% gives £96 and £24, which is wrong in both figures. The quick check at the standard rate is that the VAT should always be exactly one sixth of the gross.
The standard rate is 20% and has been since January 2011. A reduced rate of 5% applies to a defined list including domestic fuel and power, children is car seats, mobility aids for older people and certain energy-saving materials. A zero rate of 0% applies to most food, books, newspapers, children is clothing and public transport. Which rate applies depends on the item, not on who is buying it.
This matters a great deal if you are registered. Zero-rated supplies are taxable at 0%, so you charge no VAT but you can still reclaim the VAT on your costs. Exempt supplies are outside the VAT system, so you charge no VAT and you cannot reclaim the input VAT relating to them. A business making only exempt supplies generally cannot register at all. Insurance, most financial services, postage stamps and education are exempt; food and books are zero-rated.
When your taxable turnover exceeds £90,000 in any rolling twelve-month period, or when you expect to exceed it in the next thirty days alone. The rolling test catches people out — it is not your accounting year, it is any consecutive twelve months, so you must check monthly. You can also register voluntarily below the threshold, which is often worth doing if your customers are themselves VAT-registered and you have significant input VAT to reclaim.
If you are VAT-registered, yes, on purchases used for making taxable supplies, provided you hold a valid VAT invoice. There are specific exclusions: you generally cannot reclaim VAT on business entertainment, or on a car unless it is used exclusively for business, which in practice is a very high bar. Where a purchase has both business and private use, you reclaim only the business proportion.
VAT is calculated to the nearest penny in the normal way, but HMRC permits businesses to round down to the nearest penny on invoices where the calculation produces a fraction. The concession exists because line-by-line rounding on a long invoice can otherwise drift. Over a whole return the difference is negligible, and consistency matters more than which convention you pick.
Usually yes, at the same rate as the goods being delivered. Delivery is treated as part of the supply rather than as a separate service, so posting a zero-rated book attracts no VAT on the postage, while delivering standard-rated goods attracts 20% on the delivery charge too. If a single order mixes rates, the delivery charge is apportioned between them.
It depends on what you are selling and to whom, and the rules changed substantially after the UK left the EU. Goods exported outside the UK are generally zero-rated, provided you keep evidence of export. Services supplied to business customers abroad are usually outside the scope of UK VAT, with the customer accounting for it under the reverse charge. Services to overseas consumers follow different rules again. This is the area where professional advice most reliably pays for itself.