United Kingdom · 2026/27
United Kingdom VAT calculator
Add VAT to a net price or strip it out of a VAT-inclusive price using the current UK rates.
Value Added Tax is a charge on the sale of most goods and services, collected in stages along the supply chain but ultimately paid by the final customer. The standard rate is 20%, with a 5% reduced rate for a short list of items and a 0% zero rate for others. Pick the rate that applies to what you are selling or buying, and the calculator gives you both the tax portion and the total, working either direction. It is the tool for pricing a quote, checking a supplier invoice, or splitting a till receipt back into its net and tax parts.
How it works
- Decide whether you are adding VAT to a net figure or removing it from a price that already includes it, then pick the rate for the goods or services in question.
- To add VAT, multiply the net price by the rate. At 20%, £100 becomes £100 plus £20 VAT, so £120 in total.
- To remove VAT from a gross price, divide by 1 plus the rate. At 20%, divide by 1.20: a £120 gross price is £100 net plus £20 VAT.
- A quick check at the standard rate: the VAT in a gross price is the gross divided by 6, and the net is the gross divided by 1.2.
- A VAT-registered business charges this tax on its sales and reclaims the VAT on its own purchases, so the net effect passes the cost along to the end customer rather than resting on the business.
Worked example
A £250 net invoice at the standard rate carries £50 VAT, making £300 to pay. Working backwards, £300 gross contains £50 VAT and £250 net.
Key facts
- VAT is collected at each stage of the supply chain but is designed to fall on the final consumer.
- Zero-rated is not the same as exempt: a zero-rated seller can reclaim input VAT, an exempt one cannot.
- At the 20% standard rate the tax inside a gross price is exactly one sixth of that price.
- The registration threshold is based on a rolling 12-month turnover figure, not the tax year.
Tips
- When quoting a customer, state clearly whether the figure is net or VAT-inclusive to avoid a dispute later.
- To back out the tax from a receipt at the standard rate, divide the total by six for the VAT and by 1.2 for the net.
- Check the correct rate for each item against HMRC guidance, since a few everyday goods sit at the reduced or zero rate.
- Keep purchase invoices if you are registered, as they are the evidence for reclaiming input VAT on the return.
Frequently asked questions
What is the standard UK VAT rate?+
The standard rate is 20% and applies to most goods and services. A 5% reduced rate and a 0% zero rate apply to specific categories.
What is the difference between zero-rated and exempt?+
Zero-rated goods are taxable at 0%, so a business can still reclaim VAT on related costs. Exempt items, such as most financial services and insurance, are outside VAT and do not allow reclaim.
When must a business register for VAT?+
Registration is required once VAT-taxable turnover passes £90,000 in any rolling 12 months, and is optional below that. Voluntary registration below the threshold lets a business reclaim VAT on purchases, which can suit firms that sell mainly to other VAT-registered customers.
Are shop prices shown with VAT included?+
Prices to consumers normally include VAT. Business-to-business prices are often shown net, with VAT added on the invoice, which is why a trade quote and a shop price for the same item can look different.
How does a registered business actually pay VAT?+
It adds VAT on what it sells (output tax), subtracts the VAT on what it buys (input tax), and pays the difference to HMRC on a regular return. The tax therefore lands on the final consumer, not on the businesses in the chain.
Why does removing VAT use 1.2 rather than subtracting 20%?+
The 20% was added to the net figure, not the gross, so taking 20% off the gross removes too little. Dividing the gross by 1.2 recovers the original net, and the gap between the two is the true VAT.
Sources
- VAT rates · GOV.UK
- How VAT works · GOV.UK
Last updated: 2025-04-06 · Applies to 2026/27
This is an estimate for general guidance, not financial, tax, legal or medical advice. Figures can change and individual circumstances vary. Always confirm with the official sources listed before making decisions.
- Rates current for the 2026/27 tax year.
- Choose the correct rate for the specific goods or services using HMRC guidance.
Built and maintained by Vikas Dulgunde. Editorial standards.