VAT Calculator: Add or Remove VAT From Any Price

Use the VAT calculator above

Enter your amount, pick the VAT rate and tell the tool whether your figure is net (before VAT) or gross (after VAT). It instantly splits the price into its three parts: the net amount, the VAT, and the gross total. Use it to price a job, sanity-check a supplier invoice, or work out how much of a receipt you can reclaim.

How the VAT calculation works

VAT (Value Added Tax) is a tax on most goods and services in the UK. There are three rates: the standard rate of 20% on most things, a reduced rate of 5% on items like domestic energy and children's car seats, and a zero rate of 0% on essentials such as most food and children's clothes. The calculator defaults to 20% because that is what applies to the vast majority of transactions.

The maths is simpler than it looks once you see it written out. There are only two directions you ever need.

Adding VAT to a net (ex-VAT) price:

• VAT to add = net price × 0.20
• Gross price = net price × 1.20

Removing VAT from a gross (inc-VAT) price:

• Net price = gross price ÷ 1.20
• VAT included = gross price − net price (which is the same as gross ÷ 6 at the 20% rate)

That last shortcut is worth memorising: at 20% VAT, the tax is always one sixth of the gross price. So on a £120 inc-VAT total, the VAT is £120 ÷ 6 = £20. The reason people get this wrong is that they take 20% off the gross price instead of dividing by 1.20. Knocking 20% off £120 gives £96, but the correct net figure is £100 — a £4 error on a small bill, and a costly one on a large one.

For the reduced 5% rate the same logic applies: multiply by 1.05 to add VAT, divide by 1.05 to remove it. The general rule is gross = net × (1 + rate) and net = gross ÷ (1 + rate).

Worked examples with the maths shown

Example 1 — a freelancer adding VAT to a quote. Say you are a VAT-registered designer quoting £2,000 for a project. That £2,000 is your net fee. VAT to add = £2,000 × 0.20 = £400. The gross invoice total your client pays = £2,000 × 1.20 = £2,400. You keep the £2,000 and pass the £400 to HMRC on your next return. Working out what you actually owe across a quarter is where a VAT return calculator helps, because you offset the VAT you paid on purchases.

Example 2 — removing VAT from a receipt. You bought a laptop for the business and the receipt shows £899.99 including VAT. To find the net cost: £899.99 ÷ 1.20 = £749.99. The VAT element is £899.99 − £749.99 = £150.00 (or £899.99 ÷ 6, same answer). If you are VAT-registered, that £150 is input VAT you can usually reclaim, so the laptop really cost your business £749.99.

Example 3 — the reduced 5% rate on energy. A small café gets a £630 gas bill including VAT at 5%. Net = £630 ÷ 1.05 = £600. VAT = £30. Note that domestic and qualifying business energy uses the 5% rate, not 20%, so applying the standard rate here would overstate the VAT by £90.

The UK VAT rates at a glance

These rates apply across the whole UK — England, Scotland, Wales and Northern Ireland. Unlike income tax (which differs in Scotland) or stamp duty (a separate tax in each nation), VAT is a single UK-wide tax set by HMRC, so there is no regional toggle to worry about. You can confirm the current rates and what falls into each category on the official list at gov.uk/vat-rates.

Do you even need to charge VAT?

You only add VAT to your prices if your business is VAT-registered. Registration becomes compulsory once your VAT-taxable turnover crosses the registration threshold over a rolling 12-month period, and you can also register voluntarily below that. Many sole traders and small firms sit under the threshold and charge no VAT at all — in which case you would only ever use this tool to remove VAT from things you buy, not to add it to what you sell. Check the current registration threshold and how to register on gov.uk/vat-registration before you decide.

If you are weighing up registration, it is worth understanding how the Flat Rate VAT Scheme changes the sums, because under that scheme you pay HMRC a fixed percentage of your gross turnover rather than the full difference between sales and purchase VAT. For self-employed earners trying to see the bigger picture, pair this with a self-employed tax calculator to estimate income tax and National Insurance alongside any VAT.

Pricing tips most guides skip

If you sell to other VAT-registered businesses, they reclaim the VAT, so quoting your price plus VAT rarely costs you a sale. If you sell to consumers or to small non-registered businesses, the VAT is a real cost to them — registering can make you 20% more expensive overnight unless you absorb some of it. Decide who your customers are before you register voluntarily.

When you set a headline price for the public, work backwards from the gross figure you want on the shelf. If you want a product to sell at a round £30 including VAT, your net price is £30 ÷ 1.20 = £25, and the VAT is £5. Setting the net at £30 and adding VAT would push the sticker to £36, which may price you out. Tools like a profit margin calculator and a markup calculator work better when you feed them the net figure, because VAT is not your money — it is HMRC's, collected through you.

Common VAT mistakes to avoid

• Taking 20% off the gross instead of dividing by 1.20. This always understates the net price. Divide by 1.20, or take one sixth for the VAT.
• Applying 20% to a 5% item. Energy, certain mobility aids and a few other supplies are reduced-rated. Charging standard rate by mistake overcharges your customer and overstates your VAT.
• Forgetting to reclaim input VAT. If you are registered, the VAT on legitimate business purchases is reclaimable on your return — keep every VAT invoice.
• Charging VAT before you are registered. You cannot add VAT to invoices until your registration is live and you have a VAT number. Validate a supplier's number with a VAT number validator if you are unsure it is genuine.
• Rounding too early. HMRC lets you round VAT down to the nearest penny per line; rounding mid-calculation can leave invoices a few pence out.

These figures are estimates for guidance only and are not personal tax or financial advice. For a decision that affects your business, confirm the position with HMRC or a qualified accountant.

Related calculators

Once you have the VAT split, keep going: estimate what you owe each quarter with the VAT return calculator, compare schemes using the flat rate VAT calculator, and raise a compliant bill with the invoice generator.