VAT Calculator
Add VAT to a net price or strip VAT out of a gross price. Defaults to the UK 20% standard rate; switch to 5% reduced, 0% zero, or any custom rate for EU VAT, Australian GST, or other invoice-credit VAT systems.
Gross (including VAT)
£120.00
- Net (excluding VAT)
- £100.00
- VAT
- £20.00
- Gross (including VAT)
- £120.00
- VAT rate
- 20%
VAT = Net × Rate. Gross = Net + VAT. UK rates are 20% standard, 5% reduced (home energy, children's car seats), and 0% (most food, children's clothes, books). A registered business charges output VAT on sales and reclaims input VAT on purchases; the calculator returns the gross amount the customer pays.
How to use this calculator
Enter the amount, choose whether to add VAT (you have a net, ex-VAT figure and want the gross customer pays) or remove VAT (you have a gross, VAT-inclusive figure and want the net the supplier keeps), and set the rate. For UK sales use 20% for most goods and services, 5% for domestic fuel and power and a handful of other items, or 0% for most food, children's clothes, books, and newspapers. Outside the UK use the appropriate rate — 19% in Germany, 25% in Sweden, 10% Australian GST — the arithmetic is identical.
How the calculation works
Adding VAT: VAT = Net × Rate, then Gross = Net + VAT. At 20% a £100 net price becomes £120 gross. Removing VAT (extracting tax from an inclusive price) uses the HMRC "VAT fraction": Net = Gross ÷ (1 + Rate), so a £120 gross at 20% gives £100 net and £20 VAT. Equivalently the VAT fraction at 20% is 1/6 (because 20/120 = 1/6), so £120 × 1/6 = £20 — handy as a mental check. Reduced rate 5% has a VAT fraction of 1/21; zero-rated supplies have no VAT at all but must still be recorded as sales on a VAT return.
Worked example
A VAT-registered consultant invoices a client £2,500 net for advisory work at the standard 20% rate. VAT = 2,500 × 20% = £500. The client is invoiced £3,000 gross and the consultant remits £500 to HMRC (less any input VAT reclaimed on related expenses). Reversing it: if the same engagement had been quoted as "£3,000 inclusive of VAT", the net the consultant keeps is 3,000 ÷ 1.20 = £2,500 and the VAT element is £500 — the same numbers, derived from the gross instead of the net.
Frequently asked questions
What are the current UK VAT rates?
HMRC operates three rates: the standard rate of 20% (most goods and services, in place since January 2011), the reduced rate of 5% (domestic fuel and power, energy-saving materials, children's car seats, mobility aids for older people, some property renovations), and the zero rate of 0% (most food, children's clothes, books and newspapers, public transport, prescription medicines, new-build housing). Some supplies are VAT-exempt rather than zero-rated — exempt supplies (financial services, education, insurance) carry no VAT and the supplier can't reclaim input VAT, whereas zero-rated supplies are taxable at 0% and the supplier can still reclaim. The calculator covers any rate you enter; HMRC publishes the authoritative list on gov.uk under "VAT rates on different goods and services".
How do I remove VAT from a gross price?
Divide the gross by (1 + the rate as a decimal). At 20% that's gross ÷ 1.20. A £120 gross price becomes £100 net, and the VAT element is the £20 difference. HMRC calls the multiplier the "VAT fraction" — for 20% it is 1/6 (since 20 ÷ 120 = 1/6), and applying it directly to the gross gives the VAT in one step (£120 × 1/6 = £20). For the reduced 5% rate the VAT fraction is 1/21. The calculator does this automatically when you select "Remove VAT from a gross price".
When do I have to register for VAT in the UK?
A UK business must register when its taxable turnover in any rolling 12-month period exceeds £90,000 (the threshold from 1 April 2024; check gov.uk before relying on this). Once registered, the business charges VAT on its sales, can reclaim VAT on its purchases, and files VAT returns (usually quarterly) under Making Tax Digital. Below the threshold, voluntary registration is sometimes worthwhile — for example, when most customers are themselves VAT-registered and can reclaim, or when the business has significant input VAT to recover. This calculator computes the arithmetic; the registration decision is a tax-planning question and may warrant professional advice.
How is VAT different from US sales tax?
VAT is collected at every stage of the supply chain — each business charges output VAT on sales and reclaims input VAT on purchases, with the net difference paid to HMRC. The end consumer ultimately bears the cost, but the tax is collected incrementally. US sales tax is single-stage — only charged once, at the final retail sale to a consumer, at rates set by state and local jurisdictions (combined rates typically 4%–10%). The arithmetic for "add tax to a net price" is identical in both systems, so you can use this calculator for US sales tax too; just enter the combined state-plus-local rate for the relevant jurisdiction.
Why does the VAT fraction at 20% equal 1/6?
A net price of £N becomes a gross of £1.2N at 20% VAT. The VAT element is 0.2N out of 1.2N, which simplifies to 0.2/1.2 = 1/6. So multiplying any gross-inclusive price by 1/6 gives the VAT element directly. The same logic gives 1/21 for 5% (5/105 simplifies to 1/21). The VAT fraction is the standard shortcut HMRC publishes in Notice 700 ("The VAT Guide") for businesses that need to back out VAT from till totals at the end of a trading day.
Do I charge VAT on a customer outside the UK?
It depends on what is sold and to whom. Broadly: goods exported outside the UK are zero-rated (B2B and B2C), so VAT is charged at 0% but recorded on the return. Services to a B2B customer outside the UK are usually outside the scope of UK VAT under the "place of supply" rules, while B2C services have a more complex set of rules with several special regimes. Sales to EU consumers post-Brexit follow the OSS/IOSS rules for digital and low-value goods. This is one of the areas where the arithmetic is easy but the classification is hard — when in doubt, check HMRC Notice 741A or speak to an accountant before invoicing.