VAT calculator
- Add VAT to a net price or remove it from a gross price
- Standard 20% rate and 5% reduced rate
- Shows net, VAT and gross in one view
Gross (including VAT)
£120.00
£100.00 net plus £20.00 VAT at 20%.
| Net (before VAT) | £100.00 |
| VAT | £20.00 |
| Gross (including VAT) | £120.00 |
UK VAT: standard rate 20%, reduced rate 5%. Source: gov.uk VAT rates
VAT is a tax added to most goods and services in the UK. The standard rate is 20%, so a £100 item costs £120 with VAT, and the £20 goes to HMRC. Businesses that are VAT-registered charge it on their sales and reclaim it on their purchases, so the tax ends up falling on the final consumer.
The part people get wrong is removing VAT. If a price is £120 including VAT, the net isn't £120 minus 20%. That would give £96, which is too low. The 20% was added to the £100 net, not the £120 gross, so to reverse it you divide by 1.2, giving £100. This calculator handles both directions so you don't have to think about it.
Most things are standard-rated at 20%. The 5% reduced rate covers domestic gas and electricity, children's car seats, and some energy-saving materials fitted in homes. A zero rate (0%) applies to most food, children's clothing, books and newspapers. Zero-rated isn't the same as exempt: a zero-rated business can still reclaim VAT on its costs, an exempt one can't.
You must register for VAT once your taxable turnover passes £90,000 in any rolling 12-month window, not just your accounting year. Once registered you add VAT to your prices and file returns, usually quarterly. Many small businesses register voluntarily below the threshold so they can reclaim VAT on equipment and stock. If you're self-employed and weighing this up, our self-employed tax calculator covers the income tax side.