VAT Calculator
Add VAT to a net price to get the gross amount, or remove VAT from a gross (VAT-inclusive) price to find the net. All UK VAT rates supported.
Reviewed by Richard Ross · Last updated April 2026
How VAT Calculator works
How to add VAT
To add VAT to a net price, multiply the net amount by the VAT rate and add it to the net. For the standard 20% rate: gross = net × 1.20. For the reduced 5% rate: gross = net × 1.05.
How to remove VAT (reverse VAT)
To find the net price from a VAT-inclusive gross price, divide by (1 + rate). For 20% VAT: net = gross ÷ 1.20. Do not simply deduct 20% from the gross — this gives the wrong answer.
UK VAT rates
The standard rate is 20% and applies to most goods and services. The reduced rate is 5% applies to items such as domestic fuel and power, children's car seats, and some renovation work. The zero rate (0%) applies to most food, books, children's clothing, and new homes, among others.
VAT registration threshold
Businesses must register for VAT when their taxable turnover exceeds £90,000 in any rolling 12-month period (2024–25 threshold). Once registered, businesses charge VAT on their sales and can reclaim VAT on purchases.
UK VAT registration and HMRC obligations
Once VAT-registered, businesses must submit VAT returns — typically quarterly — via HMRC's Making Tax Digital (MTD) system using compatible software. Businesses with taxable turnover below £90,000 can register voluntarily, which allows them to reclaim input VAT on purchases. Voluntary registration is often worthwhile for businesses selling primarily to other VAT-registered businesses, as their customers can reclaim the VAT charged.
VAT worked example
A UK freelance designer quotes a net fee of £2,500 for a website project. Being VAT-registered, they must add standard-rate VAT: £2,500 × 1.20 = £3,000 gross. The VAT element (£500) is collected on behalf of HMRC. If the designer bought £600 (gross) of software tools for the project, the input VAT of £100 (£600 ÷ 1.20) can be reclaimed, leaving a net VAT payment to HMRC of £400 for that quarter.
Source: HMRC — VAT rates (gov.uk/vat-rates). HMRC — Making Tax Digital for VAT (gov.uk/guidance/use-making-tax-digital-for-vat). HMRC — VAT registration threshold (gov.uk/vat-registration).
Frequently asked questions
How do I calculate 20% VAT?
Multiply the net amount by 1.20. Example: a net price of £100 becomes £120 including 20% VAT. The VAT element is £20.
How do I remove VAT from a price?
Divide the gross (VAT-inclusive) price by 1.20 for standard rate. Example: £120 ÷ 1.20 = £100 net. Do not subtract 20% from £120, as that gives £96, not £100.
What is the VAT rate on energy bills?
Domestic energy (gas and electricity) is charged at the reduced rate of 5% VAT.
Do I need to charge VAT if I'm not VAT-registered?
No. Only VAT-registered businesses can charge VAT. If your turnover is below the £90,000 threshold and you haven't voluntarily registered, you must not add VAT to invoices.
Can I reclaim VAT on business purchases?
Yes, if you are VAT-registered. You reclaim input VAT on business expenses through your VAT return and pay HMRC the difference between output VAT (charged to customers) and input VAT.
What is Making Tax Digital for VAT?
Making Tax Digital (MTD) for VAT requires all VAT-registered businesses to keep digital records and submit VAT returns using HMRC-approved software. MTD has applied to all VAT-registered businesses since November 2022, regardless of turnover. Penalties apply for non-compliance.
What happens if I exceed the VAT threshold?
You must register for VAT within 30 days of the end of the month in which you exceeded £90,000 turnover. Failure to register on time can result in HMRC back-charging VAT on your sales from the date you should have registered, which can be a significant unexpected liability.
What is the VAT flat rate scheme?
The VAT Flat Rate Scheme (FRS) simplifies VAT for small businesses with taxable turnover under £150,000 (excluding VAT). Instead of calculating VAT on each sale and purchase, you pay a fixed percentage of your gross turnover to HMRC. The percentage varies by trade sector (from 4% to 16.5%). You still charge 20% VAT to customers but pay a lower flat rate to HMRC, keeping the difference. From April 2017, a "limited cost trader" rate of 16.5% applies if your VAT-inclusive expenditure on goods is less than 2% of gross turnover.
What is the difference between VAT-registered and non-VAT-registered?
Businesses with taxable turnover above £90,000 (the 2025–26 registration threshold) must register for VAT and charge it on their sales. Non-registered businesses cannot charge VAT and cannot reclaim it on purchases. Voluntary registration below the threshold is possible and can benefit businesses that sell primarily to other VAT-registered businesses (who can reclaim the VAT), but increases administration. Registration is done via HMRC's online VAT portal.
Is VAT charged on all goods and services?
No. Most goods and services are standard-rated at 20%, but some are zero-rated (0%) — including most food, books, children's clothing, and public transport. Others are reduced-rated at 5% — including domestic energy and women's sanitary products. Some supplies are VAT-exempt (no VAT charged and none reclaimable) — including financial services, insurance, education, and healthcare. The distinction between zero-rated and exempt is important: zero-rated businesses can reclaim input VAT on their costs; exempt businesses generally cannot.