VAT Calculator

Add or remove VAT from any amount. Supports UK standard rate (20%), reduced rate (5%), and custom rates.

Net Amount (£)

VAT Rate (%)

What Is a VAT Calculator?

A VAT calculator adds or removes Value Added Tax from any price in seconds. Enter the amount, select the direction (add or remove), and choose the rate. The result shows the net price, VAT amount, and gross total.

The standard UK VAT rate is 20% and applies to most goods and services. A reduced rate of 5% covers items such as home energy and child car seats. Zero-rated goods including most food and children's clothing carry 0% VAT.

Freelancers, small business owners, and accountants use this calculator daily. Strip VAT from a supplier invoice to find the net cost. Add VAT to a quote to show clients the gross price. Switch between rates for mixed-supply invoices.

How Do You Use This VAT Calculator?

Enter the amount, choose whether to add or remove VAT, and select the VAT rate. Click Calculate to see the net amount, VAT amount, and gross total.

Enter the monetary amount in pounds.
Select whether to add VAT to a net amount or remove VAT from a gross amount.
Choose the VAT rate: 20% (standard), 5% (reduced), or enter a custom rate.
Click Calculate to see the breakdown.
Copy the net, VAT, and gross figures for your invoice or accounts.

How Does the VAT Calculator Formula Work?

The formula used: VAT = Net × (Rate / 100). To remove VAT: Net = Gross / (1 + Rate / 100)

Adding VAT multiplies the net amount by the rate to find the tax portion, then adds it to the original figure.

VAT Amount = Net Price × (VAT Rate / 100)

Gross Price = Net Price + VAT Amount

Removing VAT divides the gross amount by 1 plus the rate as a decimal.

Net Price = Gross Price / (1 + VAT Rate / 100)

At 20% VAT: divide by 1.2 to remove VAT. At 5% VAT: divide by 1.05. The VAT amount is the difference between gross and net.

What Are Some Example Calculations?

Adding 20% VAT to £500: VAT = £100. Gross = £600. Removing 20% VAT from £600: Net = £500. VAT = £100.

Adding 20% VAT to a £1,250 invoice

VAT = £1,250 × 0.20 = £250. Gross = £1,250 + £250

Net = £1,250. VAT = £250. Gross = £1,500.

Removing 20% VAT from a £360 receipt

Net = £360 / 1.20 = £300. VAT = £360 - £300

Net = £300. VAT = £60. Gross = £360.

Adding 5% reduced rate VAT to a £840 energy bill

VAT = £840 × 0.05 = £42. Gross = £840 + £42

Net = £840. VAT = £42. Gross = £882.

When Should You Use a VAT Calculator?

Use this calculator when preparing invoices, checking supplier bills, or filing VAT returns. Add VAT to your quoted prices before sending to clients. Remove VAT from receipts to calculate the reclaimable input tax on your return.

Run the calculator when pricing products for sale. Determine whether to display prices inclusive or exclusive of VAT based on your customer type. B2B pricing typically shows net amounts. B2C pricing must show the VAT-inclusive price by law in the UK.

What Do These Terms Mean?

VAT (Value Added Tax)

A consumption tax added to the price of goods and services at each stage of production or distribution.

Net Price

The price before VAT is added. This is the base cost of the goods or services.

Gross Price

The total price including VAT. This is the amount the buyer pays.

Input Tax

VAT paid on business purchases that can be reclaimed from HMRC on your VAT return.

Output Tax

VAT charged to customers on sales. This amount must be paid to HMRC on your VAT return.

VAT Threshold

The turnover level at which VAT registration becomes mandatory. Set at £90,000 for the 2025/26 tax year.

How Do the Options Compare?

VAT Rate	Percentage	Category Examples
Standard	20%	Electronics, clothing (adult), furniture, professional services, alcohol
Reduced	5%	Home energy (gas and electricity), child car seats, smoking cessation products
Zero	0%	Most food, children's clothing, books, newspapers, public transport
Exempt	N/A	Insurance, financial services, education, health services, postage stamps

What Are the Best Tips to Know?

Divide by 6 as a shortcut to find the VAT portion in a 20% VAT-inclusive price (e.g., £120 / 6 = £20 VAT).
Keep VAT receipts for all business purchases above £25 to reclaim input tax on your return.
Set a calendar reminder for your quarterly VAT return deadline to avoid late-filing penalties.
Check whether your goods fall under the reduced rate (5%) or zero rate (0%) before applying 20%.
Register for the Flat Rate Scheme if your VAT-exclusive turnover is under £150,000 for simpler accounting.

What Mistakes Should You Avoid?

Subtracting 20% from a gross price instead of dividing by 1.2 — £120 minus 20% gives £96, not the correct £100.
Applying 20% VAT to zero-rated items such as most food, books, and children's clothing.
Forgetting to charge VAT after reaching the £90,000 registration threshold.
Mixing up net and gross amounts when entering figures into accounting software.

Frequently Asked Questions

What is the current UK VAT rate?

The standard UK VAT rate is 20%. There is also a reduced rate of 5% (e.g., home energy, child car seats) and a zero rate (0%) for essentials like most food and children's clothing.

How do I remove VAT from a price?

To remove 20% VAT, divide the gross amount by 1.2. For example, £120 / 1.2 = £100 net. The VAT amount is £120 - £100 = £20.

When do I need to register for VAT?

In the UK, you must register for VAT if your taxable turnover exceeds £90,000 in any 12-month period. You can also register voluntarily below this threshold.

How do I calculate VAT on a receipt?

Divide the total by 6 to find the 20% VAT portion. A £240 receipt contains £40 of VAT and £200 net. For 5% VAT, divide the total by 21 instead.

What is the difference between exempt and zero-rated?

Zero-rated goods carry 0% VAT but are still taxable supplies — businesses can reclaim input VAT. Exempt supplies are outside the VAT system entirely — no VAT is charged and no input VAT can be reclaimed on related costs.

Can I reclaim VAT on business expenses?

Yes, VAT-registered businesses can reclaim input VAT on purchases used for taxable business activities. Keep valid VAT receipts showing the supplier's VAT number, date, and VAT amount.

What is the VAT Flat Rate Scheme?

The Flat Rate Scheme lets businesses pay a fixed percentage of gross turnover to HMRC instead of calculating input and output VAT separately. Rates range from 4% to 14.5% depending on the business type. Available to businesses with VAT-exclusive turnover under £150,000.

How often do I file a VAT return?

Most UK businesses file quarterly VAT returns. The return and payment are due one month and seven days after the end of each quarter. Late filing incurs a penalty under the points-based system introduced in January 2023.

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