Add or remove VAT instantly. Choose your rate, enter an amount, get your answer.
To add VAT to a price, multiply the net amount by the VAT rate (as a decimal) and add it to the original. For the standard UK rate of 20%, that means multiplying by 1.20. So an item costing £100 excluding VAT would be £120 including VAT, with £20 being the VAT amount.
To reverse-calculate the net price from a VAT-inclusive amount, divide by 1 plus the VAT rate. For 20% VAT, divide by 1.20. So if an item costs £120 including VAT, the net price is £100 and the VAT content is £20. This is also known as a "reverse VAT calculation" and is essential when you receive a gross invoice and need to work out the VAT element.
The UK has three VAT rates. The standard rate is 20% and applies to most goods and services. The reduced rate of 5% applies to certain items like domestic fuel and power, children's car seats, and some energy-saving materials. The zero rate (0%) applies to essentials including most food, children's clothing, books, and newspapers. Some goods and services are VAT-exempt entirely, such as insurance, education, and health services.
In the UK, you must register for VAT if your taxable turnover exceeds the VAT threshold, which is currently £90,000 over any rolling 12-month period. You can also voluntarily register below this threshold, which allows you to reclaim VAT on business purchases. Once registered, you'll need to charge VAT on your sales and submit VAT returns to HMRC, typically quarterly.
If you're a small business owner, understanding VAT is essential for accurate pricing and invoicing. When quoting prices to other VAT-registered businesses, it's standard practice to quote exclusive of VAT. When selling to consumers, prices must be displayed inclusive of VAT. Our calculator above makes it easy to switch between the two.