UK VAT Calculator
Enter an amount, choose the rate, and see the net price, VAT and gross price instantly — whether you are adding VAT to a net figure or extracting it from a VAT-inclusive price. Both directions use the same simple multiplier, and getting the removal direction right is where most errors happen.
How it works
To add VAT: multiply the net amount by 1.20 (standard rate). £100 net becomes £120 gross. To remove VAT from a gross figure: divide by 1.20 — £120 gross contains £20 VAT and £100 net. A common mistake is taking 20% of the gross figure (£120 × 20% = £24 — wrong).
A handy shortcut for the standard rate: the VAT inside a gross price is exactly one sixth of it, because 20 ÷ 120 = 1/6. So £120 ÷ 6 = £20 of VAT, and £600 ÷ 6 = £100 — quicker than dividing by 1.20 and subtracting, and impossible to get wrong in the gross-times-20% way.
The 5% reduced rate works identically with its own multiplier: add VAT with × 1.05, remove it with ÷ 1.05. A £200 net energy bill becomes £210 gross, and the VAT inside a 5% gross price is one twenty-first of it (5 ÷ 105) — £210 ÷ 21 = £10.
The standard rate is 20% (most goods and services), the reduced rate 5% (home energy, children's car seats, some renovations), and the zero rate 0% (most food, books, children's clothes). Some items are exempt entirely (insurance, education), which is different from zero-rated for reclaim purposes.
That zero-rated/exempt distinction matters more than it looks: zero-rated items are still inside the VAT system — taxed at 0% — which lets the businesses selling them reclaim input VAT on their costs. Exempt items sit outside the system altogether. For a consumer the shelf price is the same; for a business the reclaim position is completely different.
Businesses must register for VAT once taxable turnover passes the registration threshold, and can then reclaim VAT on purchases. Rates have been unchanged since January 2011, which makes this one of the most stable calculations on the site.
The result shows all three figures — net, VAT and gross — for the amount and rate you enter. It performs the arithmetic on any figure you give it; whether a particular item is standard, reduced, zero-rated or exempt is a classification question, and the official rates page linked below is the place to settle it.
FAQ
How do I remove VAT from a price?
Divide the VAT-inclusive price by 1.20 for standard-rated items. For example £240 ÷ 1.20 = £200 net, so the VAT element is £40. Never multiply the gross figure by 20% — that overstates the VAT because the tax was charged on the net amount, not the gross.
What are the current UK VAT rates?
Standard rate 20%, reduced rate 5%, and zero rate 0%. These have been unchanged since January 2011. Zero-rated items (most food, books, children's clothing) are still technically VATable — which lets businesses reclaim input VAT — while exempt items (insurance, postage, education) sit outside the system.
Is VAT charged on everything?
No. Most groceries, books and newspapers, children's clothes and public transport are zero-rated; domestic energy is 5%; and some services like insurance and education are exempt. Restaurant food, alcohol, electronics and most services carry the full 20%.
What is the quickest way to work out the VAT in a price?
For the 20% standard rate, divide the gross price by six: the VAT in £120 is £20, in £90 it is £15. The shortcut works because 20/120 simplifies to one sixth. For the 5% reduced rate the equivalent is dividing by 21 — £210 of gross energy billing contains £10 of VAT.
Why is multiplying the gross price by 20% wrong?
Because VAT was charged on the net amount, not on the final price. £120 gross is £100 net plus £20 VAT; taking 20% of £120 gives £24, overstating the tax by a fifth. The correct removal is ÷ 1.20 (or the divide-by-six shortcut) — an error that matters most on invoices and expense claims, where the exact VAT element is what gets reclaimed.
What is the difference between zero-rated and exempt?
Both mean no VAT on the price, but zero-rated goods (most food, books, children's clothes) are inside the VAT system at a 0% rate, so businesses selling them can reclaim the VAT on their own costs. Exempt items (insurance, education) are outside the system entirely, with no reclaim. The distinction is invisible to shoppers and significant to businesses.
When does a business have to register for VAT?
Once taxable turnover passes the registration threshold, registration becomes compulsory — from then on the business charges VAT on its sales and can reclaim the VAT on its purchases. The rates it applies are the same 20%, 5% and 0% this calculator uses, so the add and remove arithmetic here covers day-to-day invoicing both ways.