VAT Calculator
Add VAT to a net amount or remove VAT from a gross amount
VAT Calculation
Choose whether to add or remove VAT from your amount
Amount before VAT is added
Standard UK VAT is 20%. Use 5% for reduced rate, 0% for zero rate.
Enter an amount to calculate VAT
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.
Common Mistakes to Avoid
Multiplying Gross by VAT Rate
If you have £120 gross and calculate 20% of it (£24), you'll think there's £24 of VAT. Wrong! £120 includes VAT, so you need to remove it first: £120 ÷ 1.20 = £100 net. VAT is £20, not £24.
Forgetting Which Rate Applies
Most things are 20%, but some are 5% or 0%. Children's clothes are 0%. Home energy is 5%. Restaurant meals eaten in are 20%, takeaway is 0% (if cold) or 20% (if hot). Check HMRC guidelines before adding VAT.
Adding VAT When You're Not Registered
If your turnover is under £90,000/year (UK threshold), you're not required to register for VAT. If you're not registered, you can't charge VAT. Your prices are what they are—there's no VAT to add or remove.
Showing Prices Incorrectly
B2B (business-to-business): Show prices excluding VAT, add VAT on the invoice. B2C (business-to-consumer): Show prices including VAT, mention "includes VAT" in small print. Getting this wrong confuses customers.
Not Reclaiming VAT on Eligible Purchases
If you're VAT-registered, you can reclaim VAT on business purchases. Many small businesses forget and leave money on the table. If you spent £12,000 on equipment (£10,000 + £2,000 VAT), you can reclaim the £2,000.
Mixing Flat Rate VAT Calculations
Flat Rate VAT is simpler but different. You charge 20% to customers but pay HMRC a flat percentage of your *gross* turnover (not the VAT you collected). Don't mix Flat Rate and Standard VAT calculations—they work differently.
Assuming VAT is Profit
If you charge £120 (£100 + £20 VAT), the £20 goes to HMRC, not your pocket. It's not profit. Only the £100 is yours. New businesses sometimes think "I charged £120, I earned £120"—no, you earned £100 and collected £20 for the government.