To add 20% VAT, multiply the net price by 1.20: a £100 net invoice becomes £120 gross with £20 VAT. To remove 20% VAT from a gross price, divide by 1.20 or multiply by the VAT fraction 1/6: a £120 gross invoice contains £20 VAT and £100 net.
About this calculator
A VAT (Value Added Tax) calculator computes the tax amount added to goods or services based on the applicable VAT rate. VAT is the primary consumption tax in the UK, EU, and many other countries, similar to GST in India.
The standard UK VAT rate is 20%, with a 5% reduced rate (home energy, children's car seats) and a 0% zero rate (most food, children's clothing, books). Businesses charge VAT on their sales, collect it from customers, and remit it to HMRC after deducting the VAT they paid on their own purchases — known as input VAT.
This calculator handles both directions: add VAT to a net price to find the gross invoice value, or remove VAT from a gross price using the VAT fraction (1/6 for the 20% rate).
Common uses
- Add UK 20% VAT to a net price to raise a gross invoice
- Extract the net price and VAT element from a VAT-inclusive total
- Reconcile input vs output VAT for a quarterly VAT return
- Apply the 5% reduced rate to home energy or qualifying supplies
- Verify VAT amounts on supplier invoices and receipts
Frequently asked questions
How is VAT calculated in the UK?
VAT = Net price × Rate. For a £100 net price at 20% VAT: VAT = £20 and gross price = £120. For 5% VAT: VAT = £5 and gross price = £105.
What are the UK VAT rates for 2026?
The standard rate is 20% (most goods and services), the reduced rate is 5% (home energy, children's car seats, sanitary products), and the zero rate is 0% (most food, children's clothing, books, newspapers).
How do I remove 20% VAT from a gross price?
Use the VAT fraction. For 20% VAT, the fraction is 20/120 = 1/6. VAT element = Gross × 1/6, Net = Gross × 5/6. A £120 gross price contains £20 VAT and £100 net.
Who can claim VAT back?
VAT-registered businesses can reclaim input VAT paid on goods and services used to make taxable supplies. You cannot reclaim VAT on entertainment, most cars, and exempt supplies. Non-registered businesses and end consumers cannot reclaim VAT.
What is the VAT registration threshold in the UK?
Businesses with VAT-taxable turnover above £90,000 in any rolling 12-month period must register for VAT with HMRC. You can also register voluntarily below the threshold to reclaim input VAT.
What is the difference between VAT and sales tax?
VAT is multi-stage: it is charged at every step of the supply chain and businesses reclaim input VAT. Sales tax is single-stage: charged only at the final retail sale. VAT is harder to evade and is the model used in the UK, EU, and most of the world; sales tax is mainly used in the US.