How to use the VAT Calculator
- 1 Choose Add VAT if your price is net (excluding VAT), or Remove VAT if it already includes VAT.
- 2 Pick the VAT rate: 20% standard, 5% reduced, or Other to type any rate.
- 3 Enter the amount in pounds, for example 100 or 120.
- 4 Read the net price, the VAT and the gross price in the three boxes, with the formula used underneath.
Worked example
£120 including VAT at 20%. The VAT is £120 × 20 ÷ 120 = £120 ÷ 6 = £20.00, so the net price is £100.00. Adding VAT the other way, £100 × 20% = £20 and the gross price is £120.00. At the 5% reduced rate, £100 net becomes £105.00 gross.
Features
Standard and reduced rates
Switch between the 20% standard rate and the 5% reduced rate, or type a custom rate for older invoices and other countries.
Add or remove VAT
Work forwards from a net price or backwards from a VAT-inclusive total without retyping the amount.
The VAT fraction explained
When removing 20% VAT the calculator divides by 6, the HMRC VAT fraction, so the result matches what an accountant gets.
When to use it
Raising an invoice
A VAT-registered freelancer charging £1,500 net adds £300 VAT at 20% and invoices £1,800, showing the VAT as a separate line.
Reclaiming VAT on purchases
A business paid £240 including VAT for software. Dividing by 6 shows £40 of VAT to reclaim on the VAT return.
Checking a quote
A builder quotes £4,000 plus VAT. At 20% the real cost is £4,800, which helps when comparing quotes that include VAT with ones that do not.
Frequently asked questions
What is the standard rate of VAT in the UK?
20%. It has been the standard rate since 4 January 2011 and applies to most goods and services. Some items carry the 5% reduced rate and others are zero-rated.
How do I remove VAT from a price?
Divide the VAT-inclusive price by 1.2 to get the net price at 20%. The VAT is the gross price divided by 6. For example, £120 ÷ 1.2 = £100 net and £120 ÷ 6 = £20 VAT.
What is charged at the 5% reduced rate?
Examples include domestic fuel and power, children's car seats and some energy-saving and mobility products. Rates for specific items can change, so check GOV.UK for the item you are selling.
What is zero-rated?
Most food sold for eating at home, books and newspapers, children's clothes and shoes, and public transport are zero-rated. VAT is still recorded, but at 0%.
When do I have to register for VAT?
You must register when your VAT-taxable turnover goes over £90,000 in a 12-month period, or if you expect it to go over that in the next 30 days alone.
Is this the same as the flat rate scheme?
No. This calculator shows the VAT charged on a sale. The Flat Rate Scheme changes how much VAT a small business pays HMRC, using a percentage of turnover set for its trade.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated