VAT Calculator

Add VAT to a net amount or remove VAT from a gross amount.

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About this calculator

This VAT calculator works in both directions: add VAT to a net figure to get the gross amount for an invoice, or remove VAT from a gross figure to find the net amount and the tax within it. The remove direction is the one people get wrong — you cannot simply knock 20% off a gross price, because the VAT was added to the smaller net figure, not the larger gross one.

The default rate is the UK standard 20%, but you can enter any rate, including the UK reduced rate of 5% or another country's rate.

The formula

Add VAT: Gross = Net × (1 + Rate ÷ 100) Remove VAT: Net = Gross ÷ (1 + Rate ÷ 100) VAT amount = Gross − Net

Worked example

A gross receipt shows £120 including 20% VAT.

  • Net = £120 ÷ 1.20 = £100
  • VAT = £120 − £100 = £20

Note that subtracting 20% of £120 (£24) would give the wrong answer.

Common mistakes

  • Removing VAT by subtracting the percentage from the gross amount instead of dividing.
  • Using the standard rate on goods that are reduced-rated or zero-rated.
  • Quoting consumers net prices — consumer-facing prices must normally be shown including VAT.

Frequently asked questions

Standard rate 20%, reduced rate 5% (e.g. domestic energy), and zero rate 0% (e.g. most food and children's clothing). Always confirm current rates and categories with HMRC.

In the UK, when your taxable turnover in any rolling 12-month period passes the registration threshold. Check HMRC for the current figure, as it changes.

It depends on what you sell and where the customer is. B2B services are often outside the scope of UK VAT under the reverse charge; goods have separate rules. Get specific advice for cross-border sales.

Assumptions & limitations

This is an arithmetic tool, not tax advice. Rates and category rules change — confirm anything material with HMRC or your accountant.

Sources & verification

  • VAT rates — GOV.UK — standard, reduced and zero rates

All sources last accessed 24 July 2026.

Formula last verified: 24 July 2026
Applies to: UK VAT rates in force July 2026 (standard rate 20%)
Next scheduled review: Reviewed after each UK fiscal statement (Budget / Spring Statement)
Maintained by: Steve Davis, Founder & Editor — see our editorial standards

Spotted an error or an out-of-date figure? Report it — corrections are prioritised over all other work (see our corrections policy).

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