UK VAT Calculator

Whether you are checking an invoice, pricing a product, or trying to work out how much of a receipt is actually VAT, the maths is easy to get wrong if you do it in your head. This calculator adds VAT to a net price, or extracts VAT already included in a gross price, instantly, at the standard, reduced or zero rate.

How to use the VAT calculator

First choose whether your starting figure already includes VAT (gross) or does not (net). Then enter the amount and select the VAT rate that applies: 20% standard, 5% reduced, or 0% zero-rated. The calculator instantly shows the net amount, the VAT amount, and the gross total, so you can see the full breakdown at a glance.

This is useful for freelancers and small business owners checking invoices, shoppers trying to work out how much of a price is tax, and anyone comparing a quoted price against a VAT-inclusive one from a different supplier.

How VAT is calculated

Adding VAT to a net price is straightforward: multiply the net amount by the VAT rate to get the VAT due, then add that to the net amount to get the gross total. At 20%, a £100 net price attracts £20 of VAT, giving a gross total of £120.

Extracting VAT from a gross price works differently, and this is where mistakes usually happen. You cannot simply take 20% off a gross figure to find the net amount, because the 20% VAT was calculated on the smaller net figure, not the larger gross one. Instead, you divide the gross amount by 1 plus the VAT rate (1.2 for 20% VAT) to find the net amount, then the VAT is the difference between the two.

Worked example

Say you have a gross price of £600 that already includes 20% VAT, and you need to know the net amount for your accounts.

Dividing £600 by 1.2 gives a net amount of £500. The VAT element is therefore £100 (£600 minus £500), not £120, which is what you would get by mistakenly taking 20% of the gross figure directly. This distinction matters a great deal on larger invoices, where the error compounds into a meaningfully wrong figure.

Now try the reverse in the calculator above: switch to net mode, enter £500, and select 20%. You will see the calculator adds £100 of VAT to arrive back at the same £600 gross figure, confirming the two directions are consistent with each other.

Common mistakes to avoid

The most common mistake is taking a flat percentage off a VAT-inclusive price instead of dividing by 1 plus the rate. This under-states the true net amount and over-states the VAT, which can cause real problems if the figure is used on a VAT return or in business accounts. Always check whether you are working with a gross or net starting figure before choosing which calculation to run.

Another mistake is applying the wrong rate. Not everything is charged at the standard 20% rate: energy bills are commonly charged at the 5% reduced rate, and many everyday food items are zero-rated rather than standard-rated. If you are unsure which rate applies to a particular good or service, HMRC publishes detailed guidance by category, and it is worth checking rather than assuming the standard rate applies everywhere.

Finally, remember that VAT registration status matters. If you run a small business below the VAT registration threshold, you should not be charging VAT on your invoices at all, since only VAT-registered businesses are permitted to do so. Charging VAT incorrectly can cause problems with HMRC and confusion for your customers.

Related calculators

If VAT is just one part of working out your overall tax position, our self-employed tax calculator covers Income Tax and National Insurance for sole traders, and our Income Tax calculator breaks down tax by band for any income level. If you are employed rather than self-employed, our take-home pay calculator shows your net salary after all the usual deductions. Our self-employed tax guide also covers when you might need to register for VAT as your business grows.