UK VAT Calculator

What the UK VAT calculator does

Most prices in the UK include Value Added Tax, and businesses and shoppers often need to move between a net figure and a gross one. Enter an amount and choose a rate, and the calculator either adds VAT to a net price or takes the VAT out of a gross one, showing the net, the VAT and the gross. You can also enter a quantity and a discount.

How it works

• Adding VAT: start with a net, VAT-exclusive amount. The tool multiplies it by one plus the rate for the gross price, and the VAT is the difference. £100 net at 20% gives £120 gross, including £20 of VAT.
• Removing VAT: start with a gross, VAT-inclusive amount. The tool divides it by one plus the rate for the net price, and the VAT is what is left. £120 gross at 20% gives £100 net and £20 of VAT.

Choosing the right rate

• The standard rate of 20% covers most goods and services.
• The reduced rate of 5% applies to specific categories, such as domestic fuel and power.
• The zero rate applies to items such as most food, books and children’s clothes, where VAT is charged at 0% rather than the item being exempt.

The rate depends on what you sell, and choosing it correctly is your responsibility. The calculator does the arithmetic once you have picked the rate.

Net, VAT and gross

• Net is the price before VAT, often the basis for your margins and quotes.
• VAT is the tax itself, which a registered business collects and pays to HMRC.
• Gross is the final price the customer pays, VAT included.

Mixing these up is the classic VAT mistake, especially when one quote is net and another gross. Seeing all three figures together removes the doubt.

When to use it

• Preparing invoices and quotes from a net cost.
• Taking VAT out of a gross figure for bookkeeping, expense claims or reclaiming input tax.
• Comparing prices quoted inconsistently as net or gross.
• Checking reduced or zero-rated items, where the wrong rate would distort the total.

A common mistake: reversing VAT the wrong way

The most frequent VAT error is removing tax by taking the rate off the gross price. VAT was added to the net figure, so you have to divide the gross by one plus the rate. Taking 20% off a £120 price gives £24 of VAT and a £96 net figure, when the right answers are £20 and £100. Doing it the wrong way understates the net and overstates the VAT, and the error grows with the amount.

The calculator uses the correct formula automatically. It also helps to check whether a price is net or gross before you use it, to confirm that net plus VAT equals gross, and to keep the breakdown on your records rather than only the total.

Why net is the figure businesses watch

For a VAT-registered business the net amount usually matters more, because the VAT collected is passed on to HMRC. Working in net terms lets you set margins and compare costs without the tax getting in the way. Customers think in gross terms, since that is what they pay, and the calculator shows both, which helps when a supplier quotes net and a customer expects gross.

Things to keep in mind

The result depends on the rate you choose. The wrong rate for your goods or services gives a wrong figure even though the arithmetic is right.

VAT also involves registration thresholds, rules on what can be reclaimed and the details a valid invoice must carry. The calculator gives a reliable figure for the tax on an amount but does not replace a compliant invoice or professional advice. Its rates are kept current, but before relying on a figure for filing or pricing, confirm the applicable rate with HMRC or an accountant.

This information is general in nature and is not financial advice.

About This Tool: VAT Calculator UK

VAT calculator UK: use this tool to get an instant, accurate estimate. The figures follow official HMRC guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.