UK VAT Calculator

Value added tax in the United Kingdom is added to most prices at 20 percent, with a reduced rate of 5 percent for some goods and services and a zero rate for others. Quoting a customer, reading a receipt or checking an invoice usually means converting between the price without VAT and the price with it. The arithmetic is short, but one common slip, subtracting the percentage instead of dividing, gives the wrong answer every time.

Adding VAT

Multiply the net price by one plus the rate. At 20 percent that means multiplying by 1.20. A net price of 1,000 becomes 1,200, and the VAT is 200. At 5 percent the multiplier is 1.05. At the zero rate nothing is added, but the supply is still a taxable one for the business that makes it. The page shows the net price, the VAT amount and the gross price in three rows.

Removing VAT

Divide the gross price by one plus the rate. A price of 1,200 including VAT at 20 percent divides by 1.20 to give 1,000, and the VAT is the difference, 200. That amount is one sixth of the gross, which is the same as 20 over 120. Choose “A price with tax: take it out” in the selector to switch direction. The table below the result then shows the price without VAT at each of the three rates.

A worked example

The default adds 20 percent to 1,000. The page shows a price without VAT of £1,000.00, VAT at 20 percent of £200.00 and a price with VAT of £1,200.00. The second sample takes VAT out of £1,200: the price without VAT is £1,000.00, the VAT £200.00. The third applies 5 percent to £300 of energy: VAT £15.00 and a price with VAT of £315.00. The comparison table for the first case lists £200 at 20 percent, £50 at 5 percent and £0 at 0 percent.

The three rates

Most goods and services are at the standard 20 percent. The page’s note says that some supplies, such as domestic energy and children’s car seats, are at the reduced 5 percent, and that most food, books and children’s clothes are zero-rated. Those examples are general, and the rate for a specific product depends on its description in the law, so check the government’s guidance for the item in question. An “Another rate” option accepts any percentage, which helps for historical or foreign rates.

Edge cases

An amount of zero shows zeros. A negative amount is rejected. The rate box appears only when you choose another rate, and it accepts 0 to 100. Results are shown to two decimal places, so rounding on a long invoice can differ by a penny from the total your software gives, especially when you add VAT line by line rather than on the invoice total.

For businesses

A VAT-registered business charges VAT on its taxable supplies and reclaims the VAT it pays on costs, so the amount is not a cost to the business but a sum it holds for the tax authority. The note mentions the registration threshold of 90,000 of taxable turnover, in force since 1 April 2024. Schemes such as the flat rate scheme, partial exemption and the margin scheme change how the VAT is calculated and are outside the page.

Limits

The page does not choose the rate for you or adjust for zero-rated and exempt supplies, which differ in the treatment of input VAT. It works in pounds by default but the currency symbol can be changed. For sales taxes in the United States or goods and services tax elsewhere, use the page for that country.

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