Use Vat calculator to Add VAT, Remove VAT, or break down amounts instantly – using the official UK rates of 20%, 5%, and 0%
Value Added Tax (VAT) is a consumption tax charged on most goods and services sold in the UK. It was introduced in 1973 to replace the old Purchase Tax system and create a more organised and transparent way of collecting tax.
VAT is added at each stage of production and sale, but the final cost is paid by the consumer. Businesses collect VAT on behalf of HMRC and can reclaim the VAT they pay on eligible business expenses.
Because VAT is usually included in shop and online prices, consumers may not notice it. For businesses, however, VAT must be calculated, recorded, and reported accurately. A VAT Calculator helps quickly work out VAT on prices, remove VAT from totals, and ensure figures are correct for invoices, receipts, and tax records. Read More about VAT Tax & Rate on Wikipedia.
| Rate | Description | Examples of Goods/Services |
|---|---|---|
| 20% | Standard Rate | Most goods and services (clothing, electronics, fuel, restaurant meals, hotel accommodation, mobile contracts, pay TV, furniture, hairdressing) |
| 5% | Reduced Rate | Children’s car seats, home energy-saving materials, insulation, residential caravans (no engine), some social housing, certain medical equipment for disabled people |
| 0% | Zero Rate | Most food, children’s clothes, books, newspapers, some medical goods, exports, international services |
Using the vat calculator is quick and easy. Enter the price, choose the VAT rate (20%, 5%, or 0%), and the calculator will instantly show the VAT amount and the total price.
Example:
If you enter £100 at the 20% VAT rate, the calculator will show:
VAT: £20
Total price: £120
The tool can also remove VAT from prices that already include tax, making it ideal for invoices, receipts, and quick VAT checks.
The calculator makes VAT calculations instant, but knowing the formulas can help you verify results or manually check invoices. To add VAT at the 20% rate, multiply the net price by 1.20. For example, £50 becomes £60 after adding 20% VAT. For the reduced rate of 5%, multiply the net amount by 1.05.
Removing VAT is slightly more complex because tax is already included in the total price. To extract VAT from a price that includes 20% tax, divide the amount by 1.20. For example, £120 including VAT becomes £100 net. The VAT amount is then the difference between the total price and the net price. The same logic applies for the 5% rate using the divider 1.05.
Check out: Income Tax Calculator for UK
To use a VAT Calculator for the UK effectively, it helps to understand the core formulas used for adding, removing, and extracting VAT:
When you want to add VAT to a price:
VAT-exclusive amount × 1.20 = VAT-inclusive amount
VAT amount = VAT-exclusive amount × 0.20
When you want to find the VAT portion inside a VAT-inclusive price:
VAT-inclusive amount × 20 ÷ 120 = VAT amount
(You can also use: VAT-inclusive amount ÷ 6 = VAT amount)
To convert a VAT-inclusive amount back to VAT-exclusive:
VAT-inclusive amount ÷ 1.20 = VAT-exclusive amount
| Scenario | Formula | Example |
|---|---|---|
| Add VAT to Net Price | Net Price × VAT Rate | £100 × 20% = £20 VAT |
| Total Price (Including VAT) | Net Price + VAT | £100 + £20 = £120 |
| Remove VAT from Gross Price | Gross ÷ (1 + VAT Rate) | £120 ÷ 1.20 = £100 |
| VAT Amount from Gross | Gross − (Gross ÷ 1.20) | £120 − £100 = £20 |
You must register for VAT if your business turnover goes over £90,000 in a rolling 12-month period. If you expect to reach this amount within the next 30 days, you need to register straight away. Not keeping track of your turnover can lead to penalties from HMRC.
VAT registration may be required for:
Sole traders and self-employed workers
Freelancers and contractors
Limited companies and partnerships
Online sellers on Amazon, Etsy, Shopify, or WooCommerce
Businesses selling VAT-taxable goods or services
Once registered, you must charge VAT on sales and report it to HMRC.
Make sure your income has reached or is close to the £90,000 VAT threshold.
You will need:
Business details
National Insurance number or Company Registration Number
Estimated annual turnover
Bank account information
Apply for VAT using HMRC’s online VAT registration service.
HMRC will send your VAT number and confirm your start date.
From your start date, you must:
Add VAT to taxable sales
Keep proper VAT records
Submit VAT returns using Making Tax Digital (MTD) software
VAT refunds, also known as VAT reclaims, allow VAT-registered businesses to recover VAT paid on business-related expenses. This includes purchases such as tools, equipment, stock, travel costs, office supplies, software, and other items used for business purposes. When a business files its VAT return, it subtracts the input VAT it has paid from the output VAT it has collected from customers. If the input VAT is higher, the business can claim a refund from HMRC.
A Reverse VAT Calculator is a financial tool used to determine the original price of a product or service before VAT was added. Instead of calculating how much VAT to charge on top of a price, it works backward—removing VAT from a VAT-inclusive amount to reveal the net cost and the tax portion separately.
This tool is widely used by business owners, accountants, freelancers, and online sellers who receive VAT-inclusive invoices and need to extract the net price for bookkeeping, reporting, or tax submissions. A reverse VAT calculator ensures accuracy because manually removing VAT using simple division often leads to errors.
For example, if an item costs £120 including 20% VAT, a reverse VAT calculator quickly breaks it down to show:
Net price (before VAT): £100
VAT amount: £20
Whether you work in retail, construction, eCommerce, hospitality, or imports, a reverse VAT calculator helps maintain accurate financial records and eliminates calculation mistakes.
You calculate VAT by multiplying the net amount by the VAT rate, usually 20%. For example: Net × 0.20 = VAT and Net × 1.20 = VAT-inclusive total.
VAT is calculated by applying the VAT percentage to the VAT-exclusive price. If you already have the VAT-inclusive price, divide it by 1.20 to remove VAT.
To extract VAT from a gross (VAT-inclusive) price, divide the total by 1.20 to find the net amount. Subtract net from gross to get the VAT value.
Simply use the formula: Gross ÷ 1.20 = Net, then Gross – Net = VAT amount. This works for any 20% VAT calculation.
Reverse VAT by taking the VAT-inclusive amount and dividing it by 1.20. This removes VAT and gives you the original VAT-exclusive price.
To get a VAT-inclusive total, multiply the net amount by 1.20. The extra 20% represents the VAT added.
The UK standard rate is 20%, so VAT calculations use:
Net × 0.20 = VAT
Net × 1.20 = Gross
Gross ÷ 1.20 = Net
Use simple formulas like:
Add VAT: =A1*1.20
VAT amount: =A1*0.20
Remove VAT: =A1/1.20