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VAT Calculator

Add or remove VAT from any amount. Works with the standard 20% rate, the reduced 5% rate, or any custom percentage.

FinanceAccounting

VAT calculator

£
Direction

You need

Net
£100.00
VAT
£20.00
Gross
£120.00

Using 20% VAT rate. VAT added to net amount.

How does VAT work?

VAT (Value Added Tax) is a consumption tax added to the price of goods and services. In the UK, most things you buy include VAT in the displayed price. Businesses charge VAT on their sales and reclaim it on their purchases, so the tax is ultimately paid by the end consumer.

UK VAT rates

Standard rate (20%)
Applies to most goods and services. This has been 20% since January 2011.
Reduced rate (5%)
Covers things like home energy, child car seats, and some energy-saving installations.
Zero rate (0%)
Items like most food, children's clothes, and books. VAT is technically charged, just at 0%.

Adding vs removing VAT

Adding VAT is straightforward: multiply the net amount by 1.2 for the standard rate. So something costing 100 becomes 120 inclusive of VAT.

Removing VAT trips people up because you can't just subtract 20%. If the total is 120 including VAT, the VAT portion is 120 / 6 = 20, giving you a net of 100. The shortcut is to divide the gross amount by 1.2. For the 5% rate, divide by 1.05 instead.

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