Free UK VAT Calculator
Add or remove VAT at 20%, 5% or 0%. Get your results instantly.
How to Use Our UK VAT Calculator
Our free VAT calculator helps you add or remove Value Added Tax from a price. Enter an amount, choose whether to add or remove VAT, and select the appropriate UK VAT rate.
The calculator displays the net amount, VAT amount and gross amount instantly. You can use it to check invoices, prepare quotations, compare prices or work out the VAT included in a purchase.
How to Calculate VAT in the UK
VAT is calculated as a percentage of the price before tax. The calculation differs depending on whether you are adding VAT to a net amount or removing VAT from a gross amount.
How to Add 20% VAT
Multiply the net amount by 1.20 to calculate the VAT-inclusive price.
Net: £250.00
VAT: £50.00
Gross: £300.00
How to Remove 20% VAT
Divide the VAT-inclusive amount by 1.20 to calculate the original net price.
Gross: £300.00
Net: £250.00
VAT: £50.00
A common mistake is subtracting 20% directly from a VAT-inclusive price. For example, subtracting 20% from £300 gives £240, not the correct net price of £250. To remove 20% VAT, divide by 1.20 instead.
Current UK VAT Rates Explained
The UK has three main VAT rates. The correct rate depends on the goods or services being supplied and the circumstances of the transaction.
20%
Standard Rate
Applies to most goods and services, including many professional services and everyday purchases.
5%
Reduced Rate
Applies to certain qualifying supplies, including children's car seats and domestic energy.
0%
Zero Rate
Applies to qualifying supplies such as most basic food, books and children's clothing.
These are general examples, not a complete classification of goods and services. Check the official HMRC VAT rates guidance for the rules applying to a particular supply.
Zero-Rated VAT vs VAT Exempt: What's the Difference?
Zero-rated and exempt supplies may both involve no VAT being charged to the customer, but they are treated differently for VAT purposes.
| Feature | Zero-Rated | Exempt |
|---|---|---|
| VAT charged | 0% | No VAT charged |
| Taxable supply | Yes | No |
| Input VAT recovery | Generally possible | Generally restricted |
| Examples | Most books and basic food | Certain financial and insurance services |
This difference matters particularly for businesses making both taxable and exempt supplies, because partial exemption rules may restrict VAT recovery.
When Do You Need to Register for VAT?
The UK VAT registration threshold is currently £90,000 in taxable turnover. Most UK-established businesses must register when their taxable turnover exceeds this amount over any rolling 12-month period.
Registration is also required if you expect your taxable turnover to exceed £90,000 in the next 30 days alone. Different rules may apply to businesses established outside the UK.
Example: A Growing Small Business
Imagine a business earns £8,000 in taxable sales each month. After 12 months, its rolling taxable turnover reaches £96,000, exceeding the registration threshold. The business must consider its VAT registration obligations even if its financial year has not ended.
Businesses below the threshold may choose to register voluntarily. This can be useful when recovering VAT on qualifying business expenses, but registration also brings additional administration and reporting duties.
Check the official VAT registration rulesCommon VAT Calculation Mistakes
1. Subtracting 20% to remove VAT
VAT removal requires dividing by 1.20 at the standard rate, rather than subtracting 20% from the gross price.
2. Using the wrong VAT rate
Not every product or service is subject to 20% VAT. Some qualify for reduced or zero rates, while others are exempt.
3. Confusing net and gross prices
Net prices exclude VAT, while gross prices include VAT. Check which amount appears on quotations, receipts and invoices.
4. Assuming every business charges VAT
Businesses that are not VAT registered generally cannot charge VAT on their sales. A business's VAT registration status matters when preparing invoices and quotations.
5. Using inconsistent rounding
Rounding individual invoice items and rounding a total calculation can produce different results. Businesses should follow the applicable HMRC rounding rules and use a consistent method.
VAT Calculator for Freelancers and Small Businesses
Whether you're self-employed, a contractor, a retailer or a small business owner, understanding VAT helps you prepare accurate quotations and check the amounts shown on invoices.
For example, if you quote a customer £750 excluding VAT and the standard rate applies, the VAT is £150, making the total payable £900.
You can also work backwards from a VAT-inclusive amount to identify the original price and the VAT element.
Need to create an invoice?
Use our invoice generator to prepare a professional invoice with customer details, itemised charges and calculated totals.
Create an InvoiceFrequently Asked Questions About VAT
How do I add 20% VAT to a price?
Multiply the price excluding VAT by 1.20. For example, £150 excluding VAT becomes £180 including VAT, with £30 in VAT.
How do I remove 20% VAT from a price?
Divide the VAT-inclusive price by 1.20. For example, £240 including VAT becomes £200 excluding VAT, with £40 in VAT.
Why can't I subtract 20% to remove VAT?
VAT is calculated as a percentage of the original net price, not the gross price. Subtracting 20% from a VAT-inclusive price produces an incorrect result.
What is the standard VAT rate in the UK?
The standard UK VAT rate is 20%. A reduced rate of 5% and a zero rate of 0% apply to certain qualifying goods and services.
What is the difference between zero-rated and VAT-exempt?
Zero-rated supplies are taxable at 0%, while exempt supplies are not taxable supplies. This distinction can affect whether a business can reclaim VAT on its purchases.
When must a UK business register for VAT?
Most UK-established businesses must register when taxable turnover exceeds £90,000 over a rolling 12-month period, or when they expect to exceed that amount in the next 30 days alone. Other registration rules can apply.
Can I register for VAT below the threshold?
Yes. Eligible businesses can register voluntarily. This may allow VAT recovery on qualifying business costs, but also creates VAT reporting obligations.
Can I reclaim VAT on business purchases?
VAT-registered businesses can generally reclaim VAT on qualifying purchases used for taxable business activities, subject to restrictions and record-keeping requirements.
Does this calculator submit a VAT return?
No. This tool only calculates VAT amounts. It does not register businesses for VAT, submit VAT returns or connect to HMRC.
About This VAT Calculator
This free UK VAT calculator is designed to make everyday VAT calculations quick and straightforward. It supports the standard 20%, reduced 5% and zero 0% VAT rates.
The calculator provides estimates for general informational use. It does not determine the correct VAT treatment of a transaction, prepare VAT returns or replace professional accounting advice.
VAT rates and regulations can change. Always confirm current requirements with HMRC or a qualified tax adviser.