VAT Calculator
Quickly add or remove UK VAT from an amount. Calculate net, VAT, and gross values easily.
What this calculator does
This calculator adds VAT to a net figure or strips it out of a gross one. Enter an amount, pick the rate, and choose the direction, and it returns all three numbers at once: the net amount excluding VAT, the VAT portion itself, and the gross amount including VAT.
The reason it exists is that removing VAT is not the reverse of adding it. Adding 20 percent means multiplying by 1.2, but removing it means dividing by 1.2, which is a 16.67 percent reduction, not a 20 percent one. That single arithmetic trap accounts for most VAT errors on invoices and expense claims.
When to use it
The everyday use is invoicing: you have a net price agreed with a client and need the gross to put on the invoice, or you have a receipt showing only a gross total and need to know how much input VAT you can reclaim.
It also settles pricing decisions. If you are about to cross the registration threshold and your customers are consumers rather than businesses, registering means either absorbing 20 percent out of your margin or raising prices by a fifth, and seeing both figures side by side is what makes that a real decision. For business customers who reclaim, the same change is invisible to them, which is why the answer depends entirely on who you sell to.
Understanding the inputs
Amount is whichever figure you already have. Choose Add VAT when the amount is net and you need the gross; choose Remove VAT when the amount is a gross total, such as a till receipt or a supplier invoice paid in full.
The VAT rate defaults to the UK standard rate of 20 percent, which covers most goods and services. Use 5 percent for the reduced-rate categories such as domestic energy, and 0 percent for zero-rated supplies including most food, books, newspapers, and children's clothing. Do not enter 0 percent for exempt supplies such as insurance or postage; they look the same on the invoice but they block your ability to reclaim input VAT, which is a substantially different position.
A worked example
Suppose you agree a fee of 2,400 pounds with a client. Adding VAT at 20 percent gives 480 pounds of VAT and a gross invoice of 2,880 pounds. The client pays 2,880, you pass 480 to HMRC on your next return, and 2,400 is yours.
Working the other way, a supplier invoice totalling 3,600 pounds contains VAT of exactly one sixth, or 600 pounds, with a net cost of 3,000 pounds. That 600 pounds is reclaimable input VAT, so the real cost to your business is 3,000. At the reduced rate the arithmetic differs: a 2,400 pound net supply of domestic energy carries 120 pounds of VAT for a gross of 2,520, and to strip 5 percent VAT from a gross figure you divide by 1.05 or take one twenty-first.
Limitations and assumptions
The arithmetic here is exact, but VAT liability rarely turns on arithmetic. The hard part is deciding which rate applies, whether a supply is zero-rated or exempt, and where the place of supply sits for cross-border work. This calculator assumes you already know the correct rate and does not advise on classification.
It does not handle partial exemption, the Capital Goods Scheme, margin schemes for second-hand goods, the domestic reverse charge in construction, the Flat Rate Scheme, or bad debt relief. Registration thresholds and rates are set at Budgets and can change. This is an estimate, not tax advice; HMRC is the authority, and its VAT Notices are the definitive guidance. For a business with mixed supplies or overseas customers, an accountant is not optional.
Common Questions
- How do I remove VAT from a gross figure?
- Divide by 1.2 at the standard 20 percent rate, which gives the net amount. A faster route is the VAT fraction: at 20 percent the VAT within a gross price is exactly one sixth of it. At the 5 percent reduced rate the fraction is one twenty-first. Multiplying a gross price by 0.8 is the common error and gives the wrong answer.
- What is the difference between zero-rated and exempt?
- Both mean no VAT is charged to the customer, but the consequence for the business is opposite. Zero-rated supplies, such as most food, books, and children's clothing, are taxable at 0 percent, so you can still reclaim input VAT. Exempt supplies, such as insurance and most financial services, block that reclaim entirely.
- When do I have to register for VAT?
- When taxable turnover in any rolling twelve-month period exceeds the registration threshold, currently 90,000 pounds, or when you expect to exceed it within the next 30 days alone. The threshold is reviewed at Budgets. Voluntary registration below it is allowed and often sensible if your customers are VAT-registered and you incur input VAT.
- Which goods get the 5 percent reduced rate?
- A short list including domestic fuel and power, children's car seats, mobility aids for older people, and certain energy-saving materials and residential conversions. It is not a general category you can reason your way into; the qualifying conditions are specific and set out in VAT Notices, so check the relevant notice before applying it.
- Is VAT charged on my selling price or my profit?
- On the selling price. VAT is a transaction tax, not a profit tax. What makes it neutral for businesses is the input and output mechanism: you charge VAT on sales, reclaim VAT on purchases, and pay HMRC the difference, so the tax ultimately falls on the final consumer who cannot reclaim.
- Should I use the Flat Rate Scheme?
- It simplifies returns by paying a fixed percentage of VAT-inclusive turnover instead of tracking input VAT, and is open to businesses below a turnover limit. Since the limited cost trader rules introduced a high flat percentage for businesses with minimal goods purchases, the cash advantage has largely disappeared for service businesses. Model both before opting in.
- Do I charge VAT to customers outside the UK?
- Usually not in the same way. Business-to-business services to overseas customers are generally outside the scope under the place-of-supply rules, with the customer accounting for the tax. Goods exported are typically zero-rated with proof of export. Sales to consumers in the EU follow separate rules. These are among the easiest areas to get wrong.
- How often do I file a VAT return?
- Quarterly for most businesses, with payment due one month and seven days after the period ends. Making Tax Digital requires records to be kept digitally and returns submitted through compatible software rather than typed into a portal. Annual and monthly accounting schemes exist, the latter being useful for businesses that regularly reclaim more than they charge.