VAT is applied to most UK goods and services. The standard rate is 20%, reduced rate 5% (domestic energy, children's car seats), and 0% for zero-rated goods (most food, children's clothing, books). This calculator handles adding VAT to a net price, removing VAT from a gross price, and reverse VAT to find the tax element within a VAT-inclusive amount.
You must register for VAT when taxable turnover exceeds £90,000 in a rolling 12-month period.
Value Added Tax (VAT) is charged on most goods and services in the UK at a standard rate of 20%. Whether you are a business owner pricing products, a consumer checking if you have paid the right amount, or a bookkeeper reconciling accounts, this VAT calculator handles all common scenarios instantly.
The standard rate of 20% applies to most goods and services. The reduced rate of 5% applies to specific items including domestic fuel and power, children's car seats, and sanitary products. A zero rate of 0% applies to most food, children's clothing, books, newspapers, and public transport. Some items are exempt from VAT entirely, including insurance, financial services, education, and healthcare.
Businesses must register for VAT if their taxable turnover exceeds £85,000 in a rolling 12-month period. Once registered, you must charge VAT on your sales, submit quarterly VAT returns, and pay the difference between VAT collected and VAT paid on business purchases.
Select your VAT rate (20%, 5%, or 0%), enter your amount, and choose the operation. "Add VAT" shows the gross price including VAT. "Remove VAT" extracts the VAT from a gross price to show the net amount. "Reverse VAT" is useful when you know the total including VAT and need to work out the original amount and VAT portion separately.
| Rate | Percentage | Applies To |
|---|---|---|
| Standard | 20% | Most goods and services (electronics, consultancy, construction, software) |
| Reduced | 5% | Domestic fuel, children's car seats, sanitary products, energy-saving materials |
| Zero | 0% | Most food, children's clothing, books, newspapers, public transport |
| Exempt | — | Insurance, postal services, health care, education, betting |
Exempt vs Zero-Rated: Zero-rated items still count as "taxable" for VAT registration purposes (they add to your turnover). Exempt items do not count toward the £85,000 threshold and you cannot reclaim VAT on costs related to them.
You have a net price and want to know the total including VAT. Multiply the net amount by (1 + VAT rate).
Example: £250 net × 1.20 = £300 gross (£50 VAT)
You have a gross price and want to extract the VAT amount and the net price. Divide the gross amount by (1 + VAT rate).
Example: £300 gross ÷ 1.20 = £250 net (£50 VAT)
The same as "remove VAT" — useful when you only know the total paid and need to find the original price and tax component. This is essential for checking supplier invoices or reclaiming VAT on expenses.
At 20%: multiply the gross by 0.1667 (or 1/6) to get the VAT amount directly. Then subtract to get net.
UK VAT registration is mandatory once your taxable turnover exceeds £85,000 in any rolling 12-month period. This threshold has been frozen since 2017 and remains at £85,000 for 2026/27.
Taxable turnover means the total value of everything you sell that is not VAT-exempt. It includes:
It does not include exempt sales (insurance, postage, health services).
Voluntary registration: Even if your turnover is below £85,000, you can register voluntarily. This is often smart if you have significant VAT-able business expenses (e.g., buying stock, equipment, paying for software) because you can reclaim the VAT you pay to suppliers.
If you are a limited company with £60,000 turnover and £15,000 of VAT-able expenses (software, office equipment, professional services), voluntary registration lets you reclaim £2,500 in VAT. The admin cost of filing quarterly VAT returns is usually worth it.
The VAT fraction is 1/6 (or 0.1667). If you have a gross amount including 20% VAT, multiply by 1/6 to get the VAT amount. For example, £120 gross × 1/6 = £20 VAT. This works because £20 is 1/6 of £120, and £100 is 5/6 of £120.
If you charge postage and your business is VAT registered, postage is usually zero-rated if it is Royal Mail standard delivery. However, if you add a handling fee or use a courier service, that extra charge may be standard-rated (20%). Most e-commerce businesses charge 20% VAT on their total shipping fee.
The Flat Rate Scheme lets small businesses pay a fixed percentage of their turnover as VAT, rather than calculating VAT on every transaction. You still charge 20% to customers, but you only pay HMRC a lower rate (e.g., 7.5% for accountancy, 12.5% for computer repair). You cannot reclaim VAT on purchases under this scheme. It is only worth it if your expenses are low.
VAT is calculated on the discounted net price, not the original price. If an item is £100 with a 10% discount, the net is £90. VAT at 20% is £18, making the gross £108. If you offer a discount after VAT is added, the VAT amount must be adjusted proportionally.
Yes, labour charges by VAT-registered tradespeople are standard-rated (20%) unless the work qualifies for reduced or zero rating. For example, installing energy-saving materials may qualify for 5% VAT. New build construction is zero-rated. Always check HMRC Notice 708 for construction VAT rules.
All calculations are verified against official HMRC thresholds and rates for the 2026/27 tax year. Figures are updated within 24 hours of any HMRC announcement. Calculations are for guidance only — consult a qualified accountant for personalised advice.