Calculate VAT (value-added tax) to add to a net price, or work out the VAT included in a gross price.
A VAT calculator works out Value Added Tax for a given price in two directions at once: it shows what the price would become with VAT added (if your entered amount excludes VAT), and separately what the VAT portion would be if your entered amount already includes VAT. This dual view is useful because the same number — say, £100 — means something very different depending on whether VAT still needs to be added or has already been included.
Adding VAT to a net (VAT-exclusive) price is straightforward multiplication. Extracting VAT from a gross (VAT-inclusive) price requires dividing by (1 + VAT rate), not simply taking the percentage of the gross figure — a common mistake that overstates the VAT amount.
Formula (adding VAT): VAT Amount = Net Price × (VAT Rate ÷ 100). Gross Price = Net Price + VAT Amount.
Formula (extracting VAT): Net Price = Gross Price ÷ (1 + VAT Rate ÷ 100). VAT Amount = Gross Price − Net Price.
Example: At the standard 20% rate, a £100 net price has £20 of VAT added, giving a gross price of £120. Conversely, if £100 already includes VAT at 20%, the net price is £100 ÷ 1.2 ≈ £83.33, and the VAT portion is about £16.67 — notice this is not simply 20% of £100 (which would incorrectly give £20). (Note: this example is for illustration purposes only.)
VAT is charged on most goods and services sold in the UK, with three main rates: the standard rate of 20% (which applies to most goods and services), a reduced rate of 5% (which applies to certain items such as home energy and some health/welfare-related products), and a zero rate of 0% (which applies to items such as most food, books, newspapers, and children's clothing — these are still technically "VATable" at 0%, distinct from being VAT-exempt). Businesses must register for VAT once their VAT-taxable turnover exceeds the VAT registration threshold (a figure set by HMRC and reviewed periodically), after which they must charge VAT on their sales and can generally reclaim VAT on their business purchases. Prices shown to consumers are normally VAT-inclusive (the price you see is the price you pay), while prices quoted between VAT-registered businesses are often shown VAT-exclusive, with VAT added separately on the invoice — this calculator's dual view is designed to help with both situations.
The UK standard VAT rate is 20%, which applies to most goods and services. There is also a reduced rate of 5% for certain items, and a zero rate of 0% for items such as most food, books, and children's clothing. Always check the current rate for your specific goods or services, as VAT rates and rules are set by HMRC and can change.
Divide the VAT-inclusive (gross) price by 1 plus the VAT rate as a decimal — for the standard 20% rate, divide by 1.20. For example, £120 ÷ 1.20 = £100 net price, meaning £20 of the £120 was VAT. Don't simply calculate 20% of the gross price, as this gives an incorrect (too high) VAT figure.
Zero-rated goods and services are technically subject to VAT, but at a rate of 0% — businesses selling only zero-rated items can still register for VAT and reclaim VAT on their purchases. VAT-exempt goods and services are outside the VAT system entirely — businesses dealing only in exempt supplies generally cannot register for VAT or reclaim VAT on related purchases. The distinction matters mainly for VAT registration and reclaiming input VAT.
UK businesses must register for VAT once their VAT-taxable turnover over a rolling 12-month period exceeds the VAT registration threshold set by HMRC, which is reviewed periodically. Businesses below the threshold can register voluntarily, which allows them to reclaim VAT on purchases but also requires charging VAT on sales — check current HMRC guidance for the exact threshold and whether registration makes sense for your business.
Because the same number means different things depending on context. If you have a price that doesn't yet include VAT (e.g., a cost you're building up), use the "excludes VAT" results to see what VAT to add. If you have a price that already includes VAT (e.g., a retail price), use the "includes VAT" results to see how much of it is VAT.
No. This calculator performs a simple VAT addition or extraction calculation at the rate you specify. VAT rules for digital services, imports, and cross-border transactions can involve additional complexities (such as different VAT treatment depending on the customer's location) that are beyond the scope of this simple calculator — consult HMRC guidance or an accountant for these situations.
Disclaimer: The information and figures provided on this page are for educational and illustrative purposes only and do not constitute tax advice. VAT rates, thresholds, and rules are set by HMRC and may vary depending on the goods or services involved, and may change over time. Always check current HMRC guidance or consult a qualified accountant for advice specific to your situation.