VAT Calculator
Add VAT to a price that excludes it, or work out the VAT inside a price that already includes it.
Using 2026/27 UK tax rates
Your price before VAT is added.
Total including VAT
£120.00
- Net (excluding VAT)
- £100.00
- VAT at 20%
- £20.00
- Gross (including VAT)
- £120.00
What this means
The total is what your customer pays. The VAT element is not your money — you hold it and pay it over to HMRC on your VAT return, less any VAT you can reclaim on purchases.
Quick answers
- What is the standard UK VAT rate?
The standard UK VAT rate is 20%. It applies to most goods and services unless a reduced, zero or exempt rule applies.
- How do I add 20% VAT to a price?
Multiply the net (VAT-exclusive) amount by 1.20. £100 net becomes £120 including VAT.
- How do I remove 20% VAT from a price?
Divide the VAT-inclusive amount by 1.20. £120 including VAT works back to £100 net.
- Why divide by 1.2 instead of subtracting 20%?
The 20% VAT was calculated on the smaller net figure, not on the gross total, so taking 20% off the gross figure removes too much. Dividing by 1.2 correctly reverses the original calculation.
- How is 5% VAT calculated?
To add 5% VAT, multiply the net amount by 1.05. To remove 5% VAT from a gross figure, divide by 1.05.
Make VAT easier to manage
Some businesses keep VAT collected from customers in a separate business account or savings pot so it is easier to see what belongs to the business and what may later be due to HMRC.
There is no requirement to do this, and how you hold the money is your choice. The point is simply that VAT collected on a sale is not the same as profit.
You may also find useful
- VAT Registration Threshold CalculatorTrack rolling 12-month taxable turnover against the £90,000 registration threshold.
- Corporation Tax CalculatorCompany tax on your profits, including Marginal Relief between £50,000 and £250,000.
- Gross Margin & Markup CalculatorMargin, markup and profit per unit — plus the price you need for a target margin.
- Card Processing Fee CalculatorWhat card payments cost you each month, and what a different rate would cost.
How we calculated it
Adding VAT: VAT = net × rate, and the gross total = net + VAT. At 20%, £100 net gives £20 VAT and a £120 total.
Removing VAT: net = gross ÷ (1 + rate), and VAT = gross − net. At 20% that means dividing by 1.2, not taking 20% off the gross figure — taking 20% off £120 would give £96, which is wrong.
Assumptions
Figures assume a single VAT rate across the whole amount and standard VAT accounting. The Flat Rate Scheme is not covered, and this calculator does not apply the domestic reverse charge (see the questions below).
How this calculator works
UK VAT has three main rates: the standard rate of 20% on most goods and services, a reduced rate of 5% on things such as domestic fuel and children's car seats, and a zero rate on items including most food and children's clothing. Zero-rated is not the same as exempt: zero-rated sales are taxable at 0% and still count towards your VAT registration threshold.
Use Add VAT when you know your price before tax and need the figure to put on the invoice. Use Remove VAT when you have a gross figure — a till total, a receipt or a price on a shelf — and need the net and VAT split for your records. People often search for this second calculation as a "reverse VAT calculator"; that simply means working backwards from a VAT-inclusive figure. If you are checking whether you need to register for VAT in the first place, use the VAT registration threshold calculator instead — that page covers the £90,000 threshold and the rolling 12-month test.
Worked examples
£100 plus 20% VAT
A freelancer invoices £100 for their work, plus VAT. VAT = £100 × 20% = £20, so the total charged to the client is £120. The £100 is turnover; the £20 is collected for HMRC.
£120 including VAT
A shop till total shows £120 including VAT. Net = £120 ÷ 1.2 = £100, so the VAT element is £20. Subtracting 20% from £120 would wrongly give £96 rather than £100.
£1,000 plus VAT
A garden design business quotes £1,000 for a project, plus VAT. VAT = £1,000 × 20% = £200, so the customer pays £1,200 in total. If the same business had instead quoted £1,000 including VAT, the net would be £1,000 ÷ 1.2 = £833.33 and the VAT would be £166.67.
Key terms explained
- VAT-inclusive (gross)
A price that already has VAT added, such as a shelf price or a till total. To find the VAT within it, divide by 1 plus the rate.
- VAT-exclusive (net)
A price before VAT is added, such as the figure a business records as turnover. Multiply by 1 plus the rate to find the gross total.
Common mistakes
Subtracting 20% from a VAT-inclusive total
Taking 20% off a gross figure overstates the VAT and understates the net amount, because the 20% was originally calculated on the smaller net figure, not the gross one. Always divide by 1.2 to remove VAT correctly.
Confusing reverse VAT arithmetic with the VAT reverse charge
Working backwards from a VAT-inclusive figure is just arithmetic. The domestic reverse charge is a separate statutory rule, used mainly in construction, where the customer rather than the supplier accounts for the VAT. This calculator does not apply the reverse charge.
Treating zero-rated and VAT-exempt as the same thing
Zero-rated sales are taxable at 0% and count towards the VAT registration threshold. Exempt sales are outside the VAT system entirely and do not count towards the threshold.
Common questions
How do you remove 20% VAT from a VAT-inclusive price?
Divide the VAT-inclusive price by 1.2. The result is the net amount, and the difference between the two figures is the VAT. For example, £150 ÷ 1.2 = £125 net, so the VAT is £25. Subtracting 20% from the gross price gives the wrong answer.
What is £100 plus VAT?
£100 plus 20% VAT is £120. The VAT element is £20 (£100 × 20%), and the £100 remains your net turnover.
What is £120 excluding VAT?
£120 including VAT is £100 excluding VAT, found by dividing £120 by 1.2. The VAT element is £20.
Is this the same as the VAT reverse charge?
No. Working backwards from a VAT-inclusive figure is just arithmetic. The domestic reverse charge is a separate statutory regime — used in construction and some other sectors — where the customer accounts for the VAT instead of the supplier. This calculator does not apply it.
What does VAT inclusive mean?
A VAT-inclusive price already has VAT added, so it is the total amount a customer actually pays. Till receipts and advertised consumer prices are normally VAT inclusive.
What does VAT exclusive mean?
A VAT-exclusive price is the amount before VAT is added — the figure that counts as your business turnover. Business-to-business quotes are often shown VAT exclusive, with VAT added separately.
How do I calculate 5% VAT?
Multiply the net amount by 1.05 to add 5% VAT, or divide a VAT-inclusive amount by 1.05 to remove it. The 5% reduced rate applies to specific goods and services such as domestic energy, rather than to most everyday sales.
Do I need to register for VAT?
You must register once your taxable turnover in any rolling 12-month period goes over the VAT registration threshold, or if you expect to exceed it in the next 30 days. Use the VAT registration threshold calculator to check your rolling turnover, since this calculator only handles the VAT arithmetic once you know your rate.
Can I use this calculator if I am not VAT registered?
Yes, for arithmetic such as checking a supplier's invoice or working out what a VAT-inclusive price implies. However, you cannot charge VAT on your own sales or reclaim VAT on purchases until you are registered.
Does this calculator handle the Flat Rate Scheme?
No. Under the Flat Rate Scheme you still charge customers the normal rate of VAT but pay HMRC a fixed percentage of your gross turnover, so the figures work differently. That is not covered here.
Sources
Last reviewed: 7 September 2026 · Statutory rates: 2026/27. This calculator is information only and is not tax, accounting or financial advice.