UK VAT Calculator: Add or Remove VAT
Add VAT to a net price or take VAT off a gross price at 20%, 5% or any custom rate. Free, instant and updated for 2026/27.
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Based on current UK VAT rates
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Filing VAT yourself eats a Saturday a quarter, and one wrong box can trigger a penalty. We file your VAT returns under Making Tax Digital on a fixed monthly fee.
Understanding VAT in the UK
Value Added Tax (VAT) is a consumption tax placed on goods and services in the UK. It's charged at each stage of the supply chain where value is added, from production to the point of sale.
When you're VAT registered, you must charge VAT on your sales (output tax) and can reclaim VAT on your purchases (input tax). The difference between these amounts is what you pay to or reclaim from HMRC.
UK VAT Rates Explained
The UK has three different VAT rates:
- Standard Rate (20%): Applied to most goods and services in the UK, including:
- Electronics and household appliances
- Furniture and home furnishings
- Alcoholic drinks and tobacco
- Most services including professional fees
- Reduced Rate (5%): Applied to certain goods and services, including:
- Domestic fuel and power
- Installation of energy-saving materials
- Children's car seats
- Some home renovations
- Zero Rate (0%): Applied to zero-rated goods and services, including:
- Most food items (except hot takeaway food, confectionery, etc.)
- Books and newspapers
- Children's clothes and shoes
- New residential buildings
There are also some goods and services that are exempt from VAT, such as insurance, education, and healthcare. The difference between zero-rated and exempt items is that businesses can reclaim input VAT on zero-rated items but not on exempt items. Our VAT advice service covers which rate applies in edge cases like construction, hospitality and ecommerce.
VAT Registration and Thresholds
Businesses must register for VAT when their taxable turnover exceeds £90,000 (2026/27 threshold) in a 12-month period. Once registered, businesses must:
- Charge VAT on their goods and services
- Submit VAT returns to HMRC, usually quarterly
- Pay any VAT due to HMRC
- Keep VAT records and a VAT account
Businesses can also voluntarily register for VAT even if their turnover is below the threshold, which allows them to reclaim VAT on their purchases. If you are not sure whether to register, our accountants in North London will model the cash flow impact before you submit anything to HMRC. This can be beneficial for businesses that:
- Make significant purchases with VAT that they could reclaim
- Sell primarily to VAT-registered businesses who can reclaim the VAT
- Want to appear larger and more established
VAT Calculation Methods
Adding VAT to a Net Amount
To calculate the gross amount (including VAT) from a net amount (excluding VAT):
Gross Amount = Net Amount × (1 + VAT Rate ÷ 100)
For example, with a net amount of £100 and the standard VAT rate of 20%:
Gross Amount = £100 × (1 + 20 ÷ 100) = £100 × 1.2 = £120
Removing VAT from a Gross Amount
To calculate the net amount (excluding VAT) from a gross amount (including VAT):
Net Amount = Gross Amount ÷ (1 + VAT Rate ÷ 100)
For example, with a gross amount of £120 and the standard VAT rate of 20%:
Net Amount = £120 ÷ (1 + 20 ÷ 100) = £120 ÷ 1.2 = £100
Calculating the VAT Amount
To calculate the VAT amount from a net amount:
VAT Amount = Net Amount × (VAT Rate ÷ 100)
To calculate the VAT amount from a gross amount:
VAT Amount = Gross Amount - (Gross Amount ÷ (1 + VAT Rate ÷ 100))
Reverse VAT: Working Backwards from a VAT-Inclusive Price
A reverse VAT calculation (sometimes called a backwards VAT calculation) starts with the gross price and finds the net price. At the standard 20% rate, divide the gross figure by 1.2. Do not subtract 20%, that gives the wrong answer because the VAT was added to the smaller net figure, not the gross one.
- £120 including VAT: £120 ÷ 1.2 = £100 net, so the VAT is £20
- £600 including VAT: £600 ÷ 1.2 = £500 net, so the VAT is £100
- At the 5% reduced rate: divide the gross amount by 1.05 instead
Set the calculator above to "Gross to Net" to do this automatically for any amount and any rate.
The VAT Flat Rate Scheme
Smaller businesses with taxable turnover of £150,000 or less can join the Flat Rate Scheme. Instead of reclaiming input VAT on every purchase, you pay HMRC a fixed percentage of your gross turnover. The percentage depends on your trade sector, and limited cost businesses pay 16.5%. You still charge customers 20% as normal.
The scheme saves paperwork rather than tax for most businesses, and it can cost you money if you buy a lot of standard-rated goods. Our VAT advisers can check whether the scheme leaves you better or worse off before you commit.
VAT Calculator FAQs
How do I take 20% VAT off a price?
Divide the VAT-inclusive price by 1.2. The result is the net price before VAT, and the difference between the two figures is the VAT. For example, £240 ÷ 1.2 = £200 net and £40 VAT.
What is £100 plus VAT?
£100 plus VAT at the standard 20% rate is £120. Multiply any net amount by 1.2 to add standard rate VAT.
Is VAT always 20% in the UK?
No. The standard rate is 20%, but domestic energy and certain other supplies carry the 5% reduced rate, and items like most food, books and children's clothes are zero-rated. Insurance, education and healthcare are exempt entirely.
What is the current VAT registration threshold?
£90,000 of taxable turnover in any rolling 12-month period for 2026/27. Once you pass it you must register with HMRC, charge VAT and file returns under Making Tax Digital.
Do I charge VAT on my invoices if I am not VAT registered?
No. Only VAT-registered businesses charge VAT. If you are below the threshold, you invoice without VAT and cannot reclaim VAT on purchases.
Need Help with VAT?
Our team of expert accountants can provide personalized guidance for VAT registration, returns, and planning to ensure your business remains compliant and efficient.