VAT Calculator UK: Add or Remove VAT at 20% or 5%

Add VAT to a net price or take VAT out of a gross price at the UK standard rate of 20%, the reduced rate of 5% or zero. £100 plus 20% VAT is £120; and £120 including VAT contains £20 of VAT.

The formulas

• Add VAT: gross = net × (1 + rate). At 20%, multiply by 1.2.
• Remove VAT: net = gross ÷ (1 + rate). At 20%, divide by 1.2, so the VAT is one-sixth of the gross price.
• At 5%, divide by 1.05; the VAT is 1/21 of the gross price.

A common mistake is taking 20% off a VAT-inclusive price. £120 × 20% is £24, not the £20 of VAT it actually contains.

UK VAT rates

Some supplies are exempt (for example most insurance and financial services), which is different from zero-rated: exempt supplies are outside VAT and do not let the business reclaim input VAT.

Do I need to register for VAT?

Businesses must register when VAT-taxable turnover goes over £90,000 in a rolling 12-month period, the threshold that has applied since 1 April 2024. You can register voluntarily below that.

FAQs

How do I calculate VAT on a whole invoice?

Add up the net value of the standard-rated lines and apply 20% to the total, then do the same for any reduced-rate lines. HMRC allows rounding the VAT on each line or on the invoice total, as long as you are consistent.

Can I reclaim VAT?

VAT-registered businesses can usually reclaim VAT on business purchases on their VAT return. Consumers cannot.

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Sources

• GOV.UK: VAT rates
• GOV.UK: VAT registration thresholds