VAT Calculator (Add / Remove VAT)
Add VAT to a net amount or remove VAT from a gross amount using a chosen VAT rate.
How This Calculator Works
VAT (Value Added Tax) is a consumption tax added to most goods and services in the UK and EU. This calculator handles the two most common VAT calculations:
Adding VAT (Net to Gross):
When you know the price before VAT (net amount) and need to know the total including VAT:
Gross Amount = Net Amount × (1 + VAT Rate)
Example: £100 net + 20% VAT = £100 × 1.20 = £120 gross
Removing VAT (Gross to Net):
When you have a total price including VAT and need to extract the VAT amount:
Net Amount = Gross Amount ÷ (1 + VAT Rate)
VAT Amount = Gross Amount - Net Amount
Example: £120 gross at 20% VAT = £120 ÷ 1.20 = £100 net, £20 VAT
Why Not Just Multiply by 0.20?
If you have £120 gross and multiply by 0.20, you get £24—wrong! That's 20% of the gross. You need to divide by 1.20 to extract the net, then calculate VAT on the net. That's what this calculator does correctly.
The VAT Rates:
- Standard Rate: 20% (most goods/services)
- Reduced Rate: 5% (home energy, child car seats)
- Zero Rate: 0% (most food, books, children's clothes)
Each rate is calculated the same way, just with different percentages.
When to Use This Calculator
Creating Invoices:
You're VAT-registered and need to show net amount, VAT amount, and gross total on your invoices. Input your service/product price (net), add VAT, display all three amounts.
Checking Receipts:
You bought something for £240 including VAT. How much was the actual cost vs the VAT? Remove VAT to see you paid £200 for the item + £40 in tax.
Reclaiming VAT:
If you're VAT-registered, you can reclaim VAT on business purchases. This calculator shows you how much VAT you can reclaim from your business expenses.
Comparing Prices:
You see two quotes: One says "£100 + VAT", another says "£120 total". Which is cheaper? Add VAT to the first (£120) to compare like-for-like.
Budgeting:
You have £10,000 for equipment. If prices include VAT, you can only spend £8,333 (the rest is VAT). If you're VAT-registered and can reclaim it, you get the VAT back, so you can budget the full £10,000.
Flat Rate VAT Scheme:
You're on the Flat Rate scheme. You charge 20% VAT but only pay HMRC 14.5% (example rate). Input a sale to see how much VAT you charge, then calculate how much to pay HMRC.
Cross-Border Trade:
Selling to EU customers? Some transactions are zero-rated (0% VAT) if the customer is VAT-registered in another EU country. Calculate the net amount they pay without VAT.
Frequently Asked Questions
Do I have to register for VAT?
In the UK, you must register if your VAT-taxable turnover exceeds £90,000 in any 12-month period (as of 2024). Below that, registration is optional. Voluntary registration lets you reclaim VAT on business purchases, but you must charge VAT to customers and file quarterly returns.
Can I charge VAT if I'm not registered?
No. Charging VAT when you're not registered is illegal and considered fraud. If you're not registered, your prices are simply your prices—no VAT component exists. If you mistakenly add "VAT" to an invoice, you're liable to pay that amount to HMRC even though you're not registered.
What's the Flat Rate VAT Scheme?
A simplified scheme for small businesses (turnover under £150k). Instead of tracking VAT on every purchase, you pay HMRC a fixed percentage of your gross turnover (rate varies by industry, usually 10-16%). You still charge customers 20% VAT, but keep the difference. Trade-off: You can't reclaim VAT on purchases (except capital assets over £2,000).
Can I reclaim VAT on everything?
No. You can only reclaim VAT on items used for business purposes. Personal use? No VAT reclaim. Mixed use (e.g., a car you use for business and personal)? You can only reclaim the business proportion. Some items are always blocked: client entertaining, non-commercial vehicles.
What if I sell to customers outside the UK?
It depends. EU: If the customer is VAT-registered in an EU country and gives you their VAT number, it's usually zero-rated (0% VAT). If they're not VAT-registered or are a consumer, you may charge VAT. Outside EU: Usually zero-rated. Rules are complex—consult HMRC guidelines for your specific situation.
Do I charge VAT on digital services?
If you sell to UK consumers: Yes, 20%. If you sell to UK businesses: Yes, 20%. If you sell to EU consumers: VAT rules depend on the customer's country (this changed post-Brexit). If you sell outside UK/EU: Usually no VAT. For EU sales, you may need to register for VAT MOSS (Mini One Stop Shop) scheme.