Use the calculator
How this calculator works
The calculator does one of two things. Choose Add VAT when you know the net price (before VAT) and want the total a customer pays. Choose Remove VAT when you have a price that already includes VAT and need to split it into the net amount and the VAT element.
Adding VAT multiplies the net price by (1 + the rate). Removing VAT divides the gross price by (1 + the rate). For example, at 20% the gross price is 120% of the net price, so the VAT within a gross price is one-sixth of it, not 20% of it. That is the most common mistake people make when they work out VAT in their head.
You can type any rate into the rate box, so the same tool works for the 20% standard rate, the 5% reduced rate or any other figure you need to check.
Worked examples
All three results were produced by this calculator.
Example 1: adding 20% VAT to a £250 invoice
£250 × 1.2 = £300 total, of which £50 is VAT. A sole trader who has registered for VAT would invoice £300 and pay the £50 to HMRC, less any VAT they can reclaim on their own business costs.
Example 2: finding the VAT in an £84 receipt
£84 ÷ 1.2 = £70 net, so the VAT is £14. Taking 20% off £84 would give £67.20 and understate the net price by £2.80. If you are reclaiming VAT on a purchase, use the VAT figure shown on a valid VAT invoice rather than a calculation like this.
Example 3: removing 5% VAT from a £126 energy bill
£126 ÷ 1.05 = £120 net, with £6 of VAT. Domestic energy is normally charged at the reduced rate, which is why the VAT share on a household energy bill is much smaller than on most other purchases.
UK VAT rates for 2026/27
| Rate | Percentage | Examples given by GOV.UK |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Some goods and services, such as children's car seats and home energy |
| Zero | 0% | Most food and children's clothes |
| Exempt | No VAT | For example postage stamps and financial and property transactions |
The VAT registration threshold is £90,000 of taxable turnover in a rolling 12-month period. Zero-rated sales still count towards that threshold; exempt sales do not.
Assumptions and what this calculator does not cover
- Choosing the rate: the calculator does not decide which rate applies. The rate depends on exactly what is being sold, and some items are zero-rated or exempt. Check HMRC's list of rates for goods and services.
- Rounding: results are rounded to the nearest penny. Invoices with many lines may round VAT per line or on the total, which can make a small difference.
- Not included: the Flat Rate Scheme, margin schemes for second-hand goods, the domestic reverse charge for construction, and VAT on imports or overseas sales.
- Registration: the calculator tells you nothing about whether you must register. Whether you must register depends on your taxable turnover, not on a single sale.
Using VAT figures in practice
For consumers, the price on a shelf or website almost always includes VAT, so removing VAT is mainly useful for understanding how much of a price is tax. For businesses, the distinction matters more. A VAT-registered business normally quotes prices to other businesses net of VAT, then adds VAT on the invoice. When quoting to consumers, prices should usually include VAT.
If you are close to the registration threshold, it is worth keeping a running total of taxable turnover over the last 12 months, checking it each month rather than only at the end of the tax year. Once registered, you need to charge VAT at the correct rate on each item, keep VAT records and file returns using Making Tax Digital compatible software. HMRC's VAT guide (Notice 700) explains these rules in detail.
Frequently asked questions
How do I work out VAT from a price that already includes it?
Divide the price by 1.2 to find the net amount at 20%, then subtract that from the original price. The VAT element is always one-sixth of a price that includes 20% VAT.
What is the difference between zero-rated and exempt?
Zero-rated goods are taxable at 0%: they count towards your VAT turnover and you can usually reclaim VAT on related costs. Exempt goods and services are outside the VAT system, do not count towards the threshold and generally do not let you reclaim related VAT.
When does a business have to register for VAT?
When taxable turnover over the last 12 months goes over £90,000, or when you expect it to go over £90,000 in the next 30 days. You can also register voluntarily below that level.
Can I charge VAT if I am not registered?
No. Only VAT-registered businesses can charge VAT and must show their VAT registration number on their invoices.
Has the standard rate always been 20%?
No. GOV.UK records that the standard rate rose to 20% on 4 January 2011, from 17.5%.
Sources
- GOV.UK: VAT rates
- GOV.UK (HMRC): Rates of VAT on different goods and services
- GOV.UK: When to register for VAT
- HMRC: VAT guide (VAT Notice 700)
Rates for tax year 2026/27, last reviewed October 2026.
Results are estimates for planning, not financial or tax advice. See our terms and methodology.