UK VAT Calculator: How to Add, Remove and Work Out VAT
Working out VAT doesn’t have to mean pulling out a spreadsheet. Whether you’re pricing a product, checking a supplier invoice, or just trying to figure out what a receipt actually cost before tax, this guide walks through exactly how UK VAT is calculated — with the formulas, worked examples, and current 2026 rates you need to get it right every time.
Use the calculator above to get an instant answer, or read on for the full breakdown of how the numbers work.
What Is VAT?
VAT (Value Added Tax) is a consumption tax charged on most goods and services sold in the UK. It’s collected by VAT-registered businesses on behalf of HMRC: the business charges VAT on what it sells (output tax), reclaims the VAT it has paid on its own purchases (input tax), and pays HMRC the difference — usually every quarter.
The person who ultimately pays VAT is the end consumer. As a shopper, the VAT is simply baked into the price you see on the shelf or the total on your receipt.
Current UK VAT Rates (2026)
There are three VAT rates in the UK, and which one applies depends on the goods or service — not on the business selling them. Many businesses charge a mix of all three.
| VAT Rate | Percentage | Applies To |
|---|---|---|
| Standard Rate | 20% | Most goods and services in the UK |
| Reduced Rate | 5% | Domestic energy, children’s car seats, energy-saving materials |
| Zero Rate | 0% | Most food, children’s clothing, books and newspapers |
| Exempt | — | Insurance, most financial services, postage, health & education |
How to Calculate VAT: Adding VAT to a Price
To add VAT to a net (pre-VAT) price, multiply by 1 plus the VAT rate.
Formula:
At the standard 20% rate, that means multiplying by 1.20.
Example: £500 × 1.20 = £600. The net price is £500, the VAT is £100, and the gross price is £600.
| Net Price (ex. VAT) | VAT (20%) | Gross Price (inc. VAT) |
|---|---|---|
| £100 | £20 | £120 |
| £500 | £100 | £600 |
| £1,000 | £200 | £1,200 |
| £1,500 | £300 | £1,800 |
How to Remove VAT: Reverse VAT Calculation
This is the calculation people get wrong most often. To find the price before VAT from a VAT-inclusive (gross) price, you divide — you don’t just subtract the percentage.
Formula:
Example: £1,200 ÷ 1.20 = £1,000. That means the VAT portion is £200, not £240.
A quicker shortcut for the standard rate: the VAT portion of a VAT-inclusive price is always the gross price × 1/6 (because 20 ÷ 120 = 1/6). So £1,200 × 1/6 = £200 VAT, leaving £1,000 net — the same answer as above.
VAT Registration Threshold
If you run a business, you must register for VAT once your taxable turnover exceeds £90,000 in any rolling 12-month period — not just at the end of your financial year. This threshold applies UK-wide, including for businesses trading in Scotland and Northern Ireland.
- You must register within 30 days of exceeding the threshold, or if you expect to exceed it in the next 30 days alone.
- You can register voluntarily below £90,000, which can be worthwhile if your clients can reclaim VAT and you have significant VAT-able costs.
- You can apply to deregister if your taxable turnover falls below £88,000 for the next 12 months.
VAT Calculator: Worked Examples by Amount
Here’s how the maths plays out at a few common amounts, using the standard 20% rate:
- £100 plus VAT = £120 (VAT: £20)
- £500 plus VAT = £600 (VAT: £100)
- £1,000 plus VAT = £1,200 (VAT: £200)
- £1,500 plus VAT = £1,800 (VAT: £300)
- £2,000 plus VAT = £2,400 (VAT: £400)
For any other amount, the same formulas above apply — multiply by 1.20 to add VAT, divide by 1.20 to remove it.
VAT Calculators for Scotland, Northern Ireland and Ireland
VAT is a UK-wide tax administered by HMRC, so the standard 20%, reduced 5%, and zero 0% rates apply identically whether you’re calculating VAT in England, Scotland, Wales or Northern Ireland — there’s no separate Scottish or Northern Irish VAT rate. The Republic of Ireland is a different tax jurisdiction with its own rates, set by Irish Revenue rather than HMRC, so use a dedicated Irish VAT calculator if you’re trading across the border.
Frequently Asked Questions
What is the current VAT rate in the UK?
The standard UK VAT rate is 20%. A reduced rate of 5% applies to items like domestic energy and children’s car seats, and a zero rate (0%) applies to most food, children’s clothing, and books.
How do I work out VAT backwards from a total?
Divide the VAT-inclusive total by 1.20 (for the standard rate) to get the net price. Subtract that from the total to find the VAT amount. For example, £600 ÷ 1.20 = £500 net, so the VAT was £100.
How much is VAT on £100?
At the standard 20% rate, VAT on £100 is £20, making the gross total £120.
Do I need to charge VAT if I’m not VAT-registered?
No. Only VAT-registered businesses can charge and collect VAT. If your taxable turnover is below the £90,000 registration threshold and you haven’t registered voluntarily, you shouldn’t add VAT to your invoices.
What’s the difference between net and gross price?
The net price excludes VAT; the gross price includes it. “Ex VAT” or “exclusive of VAT” means net; “inc VAT” or “inclusive of VAT” means gross.
What is the VAT Flat Rate Scheme?
The Flat Rate Scheme lets small businesses with turnover under £150,000 pay HMRC a fixed percentage of VAT-inclusive turnover, rather than working out the difference between output and input tax. Rates range from 4% to 14.5% depending on industry, though the Limited Cost Trader rule pushes many low-expense businesses to 16.5%.
How do I calculate VAT on mileage?
VAT-registered businesses can reclaim VAT on the fuel element of a mileage claim using HMRC’s advisory fuel rates, not the full mileage rate. Multiply business miles by the relevant advisory fuel rate to get the fuel portion, then extract VAT from that figure using the 1/6 fraction at the standard rate.
How do I calculate the VAT I owe HMRC?
Subtract the VAT you’ve paid on business purchases (input tax) from the VAT you’ve charged customers (output tax). The difference is what you pay to, or reclaim from, HMRC — usually reported via a quarterly VAT return through Making Tax Digital.
How do VAT refunds work in the UK?
Tax-free shopping for overseas visitors was withdrawn in Great Britain from January 2021, so most tourists can no longer reclaim VAT on purchases. VAT-registered businesses, however, can reclaim VAT whenever their input tax exceeds their output tax, refunded by HMRC after a VAT return is filed.
How is VAT calculated on imports, alongside duty?
Import VAT is charged on the total landed cost — the goods value plus shipping, insurance, and any customs duty — not just the price of the goods. Add duty first, then apply the VAT rate to that combined figure.
Does VAT affect my profit margin?
No — VAT you charge customers isn’t business income, and VAT you pay on costs isn’t a true expense, since both pass through to HMRC. Margin and profit should always be calculated on net (ex-VAT) revenue and net costs, not VAT-inclusive figures.
What is the HMRC VAT helpline number?
For VAT enquiries, HMRC can be contacted on 0300 200 3700.
How much is VAT on £100 at the reduced 5% rate?
At the reduced 5% rate, VAT on £100 is £5, making the gross total £105 (£100 × 1.05).
What do “ex VAT” and “inc VAT” mean?
“Ex VAT”, “excl. VAT” and “nett of VAT” all mean the same thing: a price before VAT is added — the net price. “Inc VAT” or “incl. VAT” means VAT is already included — the gross price.
Summary
Adding VAT means multiplying by 1 plus the rate (× 1.20 at the standard rate); removing VAT means dividing by that same figure, never just subtracting the percentage. Use the calculator at the top of this page to get an instant, accurate result for any amount, at any of the UK’s three VAT rates.