How to calculate VAT
VAT (Value Added Tax) is a tax added to most goods and services in the UK. To add VAT to a net price, multiply the net figure by the VAT rate and add it on — at the standard 20% rate, £1,000 net becomes £200 VAT and £1,200 gross. To remove VAT from a gross (VAT-inclusive) price, divide by 1.20 — a £1,200 gross figure contains £1,000 net and £200 VAT. Our calculator handles both directions automatically: enter your figure, pick the rate, and switch between Add VAT and Remove VAT.
UK VAT rates
The standard rate of 20% applies to most goods and services. A reduced rate of 5% applies to some goods and services, such as domestic energy and children's car seats. A zero rate of 0% applies to items such as most food and children's clothing — these are still VAT-taxable, just charged at 0%.
When do I need to register for VAT?
You must register for VAT if your taxable turnover goes over the £90,000 registration threshold in any rolling 12-month period, or if you expect to go over it in the next 30 days. You can also register voluntarily below the threshold, which can make sense if you sell mostly to VAT-registered businesses or want to reclaim VAT on your costs.
Frequently asked questions about VAT
How do I calculate VAT?
To add VAT, multiply the net amount by the VAT rate and add it to the net figure. At the standard 20% rate, £1,000 net becomes £200 VAT and £1,200 gross. To remove VAT from a gross figure, divide by 1.20 to get the net amount.
How do I remove VAT from a price?
Divide the gross (VAT-inclusive) figure by 1.20 for the 20% standard rate. The result is the net amount, and the difference between the gross and net figures is the VAT.
What is the current UK VAT rate?
The standard UK VAT rate is 20%. A reduced rate of 5% applies to some goods and services such as domestic energy, and a zero rate of 0% applies to items such as most food and children's clothing.
When do I have to register for VAT?
You must register for VAT if your taxable turnover exceeds the £90,000 registration threshold in any rolling 12-month period, or if you expect to exceed it within the next 30 days. You can also register voluntarily below the threshold.