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VAT GUIDE

How to Calculate VAT in the UK

Whether you're checking a supplier's price or preparing an invoice, VAT calculations are easier when you know whether your starting figure includes VAT.

UK business guideFree tools included

Learn how to add and remove UK VAT at 20% and 5%, with worked examples and a free VAT calculator.

01

How do you add 20% VAT?

To add 20% VAT to a price excluding VAT, multiply the net price by 1.20. For example, £100 × 1.20 = £120 including VAT. The VAT amount is £20.

02

How do you remove 20% VAT?

To find the price before VAT from a VAT-inclusive total, divide by 1.20. For example, £120 ÷ 1.20 = £100 before VAT. The VAT portion is £20.

Don't simply subtract 20% from the VAT-inclusive amount: that gives the wrong answer because the percentage is calculated from the net price.

Worked example

Adding 20% VAT

A £100 item subject to standard-rate VAT

Price before VAT£100.00
VAT at 20%+ £20.00
Price including VAT£120.00
Formula: £100 × 1.20 = £120. To reverse it, £120 ÷ 1.20 = £100.
03

What about 5% VAT?

For a supply that qualifies for the reduced 5% rate, multiply the net price by 1.05 to add VAT, or divide the VAT-inclusive total by 1.05 to remove it. For example, £200 before VAT becomes £210 including VAT.

04

Standard, reduced and zero rates

The UK has a standard VAT rate of 20%, a reduced rate of 5% for certain supplies, and a zero rate for certain supplies. Some supplies are exempt or outside the scope of VAT, which is not the same as zero-rated.

Check the correct VAT treatment for your goods or services before charging customers. The examples on this page are for arithmetic, not a determination of which rate applies.

05

Calculate VAT without doing the maths

Use the free RynovaSuite VAT calculator to switch between adding and removing VAT and check your figures before invoicing.

Frequently asked questions

What is 20% VAT on £100?

£20 VAT. The total including VAT is £120.

How much VAT is included in £120?

At a 20% rate, £120 including VAT contains £20 VAT and £100 before VAT.

Is every product or service charged at 20% VAT?

No. Reduced-rate, zero-rated, exempt and outside-the-scope treatments can apply depending on the supply.

Free RynovaSuite tool

Skip the manual calculations

Add or remove VAT in seconds using our free UK VAT calculator.

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General information only. Check current requirements and VAT treatment using official UK government guidance where applicable.