TaxIncome Tax NI Pension Student Loan VAT CGT

Tax year 2026/27 · Rest of UK · annual

UK VAT Calculator

Add or remove 20% VAT from any price in seconds.

Tax year

Region

Schedule

Your details

Calculation

Net amount (before VAT)

Gross price (inc. VAT)

£1,200

VAT at 20%: £200

Breakdown

Net amount	£1,000
VAT (20%)	£200
Gross amount	£1,200

Interactive scenarios

Tax and deductions, your way

Tax year

Region

Pay schedule

Salary £45,000

Net (monthly)

£2,806

Income tax (monthly)

£541

NI (monthly)

£216

Effective rate

20.2%

Modelled on a 5% pension. Showing monthly figures, rest of UK, tax year 2026/27.

The full guide

Everything worth knowing about VAT

Worked examples with real figures, the rules underneath the number, and the traps that catch people out.

UK VAT calculator: add or remove VAT in seconds

The UK VAT calculator adds VAT to a net price or strips it back out of a gross one at the rate you choose: 20% standard, 5% reduced or 0%. Net £850 at the standard rate becomes £1,020 gross, and a £300 gross price contains exactly £50 of VAT.

Most VAT errors come from one confusion, taking a percentage of the wrong figure. The sections below show the two directions separately, then cover registration, the flat rate scheme and the mistakes that land in HMRC enquiry letters.

Divide to remove VAT. Never subtract the percentage.

The one sixth shortcut

At the 20% rate, the VAT inside a gross price is exactly one sixth of it. A £300 receipt holds £50 of VAT, not £60, because the tax is a sixth of the total rather than a fifth added on top.

VAT rates in the UK: 20%, 5%, zero rated and exempt

Most goods and services carry the standard rate of 20%. A reduced rate of 5% covers items such as domestic energy and children's car seats. Zero rated items, including most food, children's clothes, books and newly built homes, are taxed at 0% while still counting as taxable supplies.

Exempt supplies sit outside VAT entirely. Insurance, finance, health services, education and most property rents are exempt, and the difference from zero rating matters: a zero rated business can reclaim VAT on its costs, while an exempt business generally cannot, and a partly exempt business needs a special calculation.

Get the category wrong and every invoice after it is wrong too. The calculator lets you switch rates precisely because a basket of mixed supplies rarely sits at a single rate, and the wrong starting rate defeats even perfect arithmetic.

Adding VAT and removing VAT: the two calculations

To add VAT, multiply the net price by 1.2 at the standard rate. £850 times 1.2 is £1,020, made of £850 net plus £170 of VAT. At the reduced rate you multiply by 1.05 instead, so £200 of domestic energy work becomes £210.

To remove VAT, divide the gross price by 1.2. £300 divided by 1.2 is £250 net, leaving £50 of VAT. Dividing strips the tax out exactly because the gross figure is 120% of the net, and reversing a percentage increase always means dividing, never subtracting the same percentage.

Subtracting 20% from £300 gives £240, which understates the net by £10 and overstates the VAT by the same amount. It is the single most common VAT error in small business spreadsheets, and a steady stream of HMRC assessments is built on it.

Each rate has its own fraction of the gross price. At 20% the VAT inside is one sixth of the total. At the reduced 5% rate it is one twenty first, which is why £210 of domestic energy work holds exactly £10 of VAT. Learn the fraction for the rate you charge and you can strip VAT out of any gross figure in your head, including a till total at the end of the day.

VAT breakdown

Net, VAT and gross on one invoice

Net £250

VAT at 20% £50

Gross price £300: the customer pays £300, the business keeps £250 and £50 goes to HMRC.

Adding and removing VAT on the same £850 job

Quote a job at net £850 and VAT at 20% adds £170, so the customer pays £1,020. Your VAT return for that quarter gains £170 of output tax, and the £850 is your income.

Now work backwards from a £1,020 invoice total. Divide by 1.2 and you return to £850 net with £170 of VAT. The two directions always reconcile when you divide rather than subtract 20%.

The same shortcut scales to a whole week of trading. A retailer who takes £6,000 across the till, all standard rated, holds one sixth of it as VAT: £1,000 of tax on £5,000 of net sales. Taking 20% of the gross instead claims £1,200 of VAT and overstates the tax by £200.

The £90,000 registration threshold

You must register for VAT when your taxable turnover passes £90,000 in any rolling 12 month period, or when you expect it to pass £90,000 in the next 30 days alone. Rolling means the test runs every month on the previous twelve months, not once at your year end.

Miss the deadline and you owe VAT on sales from the date you should have registered, whether or not you charged it to customers. On £100,000 of gross sales that oversight can produce a five figure bill payable out of money you have already spent.

Voluntary registration below the threshold suits businesses selling mainly to VAT registered customers, who reclaim the tax anyway, because it lets you reclaim VAT on your own costs. It suits consumer facing traders far less, since the 20% lands directly on their prices and can make them a fifth more expensive than unregistered rivals.

Registration also runs in reverse. A business whose taxable turnover falls below £88,000 can ask to deregister, which removes the duty to charge VAT and the right to reclaim it in a single step.

Registration has one consolation for early traders. You can reclaim VAT on goods bought up to four years before registration that you still hold or used to make taxable supplies, and on services bought in the six months before, provided the other conditions are met. Keep the invoices, because that reclaim sits on your first return and HMRC expects the paperwork to match.

The flat rate scheme: simpler VAT for small businesses

Businesses with taxable turnover of £150,000 or less, excluding VAT, can join the flat rate scheme. Instead of netting VAT on every sale against VAT on every purchase, you pay HMRC a fixed percentage of your gross turnover and keep the difference.

The percentage depends on your trade sector. On £60,000 of VAT inclusive turnover, a sector rate of 14.5% means paying £8,700 across the year, with no per invoice reclaim on most purchases. The input VAT you cannot reclaim is the price of the simplicity, so the scheme rewards businesses with low costs and punishes those with heavy VAT bearing expenses.

One trap dominates the scheme. Businesses whose spending on goods runs below 2% of turnover are classed as limited cost businesses and pay a flat 16.5% instead, which is £9,900 on that same £60,000 and wipes out the benefit for most service firms. Check that test before you join, and expect to leave the scheme once total income passes £230,000, where membership must end.

One genuine saving hides in the small print: businesses in their first year of VAT registration take 1 percentage point off their sector rate, so the 14.5% example above drops to 13.5% and the bill on £60,000 falls from £8,700 to £8,100.

Joining the scheme does not retire your invoice obligations. You still issue VAT invoices showing the standard VAT amount, and your customers reclaim exactly as before. Only your own return changes, which is what makes the scheme cheap to administer.

VAT invoices and the quarterly return: what you actually file

A valid VAT invoice carries your VAT registration number, a unique sequential invoice number, the date, a clear description of the supply and the VAT rate and amount shown separately from the net. Without those elements your customer cannot reclaim the tax, and you cannot defend the figure on your own return.

Registered businesses file a return, usually every quarter, that totals output VAT on sales and deducts input VAT on purchases. The difference goes to HMRC, or comes back to you when purchases outweigh sales. Making Tax Digital requires the records behind those totals to be kept digitally and filed through compatible software, with payment due one month and seven days after the period ends.

The calculator on this page handles the per price arithmetic. The return is where those prices accumulate, which is why a small per invoice error repeated across a quarter becomes a number HMRC will ask about.

Common VAT errors and what they cost

Gross and net confusion heads the list. Prices quoted to consumers include VAT by law, while prices quoted between businesses usually exclude it, and mixing the two conventions inside one spreadsheet corrupts every margin beneath them.

Claiming VAT without a valid VAT invoice, or on items where reclaim is blocked such as business entertainment and most car purchases, draws assessments plus interest. The invoice is the evidence HMRC asks for, not the bank statement.

Rounding is the quiet error. Software that rounds every invoice line up hands small overclaims to HMRC quarter after quarter, and pennies per invoice become pounds per year. Charging VAT before your registration date, or forgetting to charge it after, completes the set of errors that turn a routine enquiry into a bill.

Partly exempt businesses add one more. If you sell a mix of taxable and exempt supplies, you can reclaim only the share of input VAT that relates to the taxable side, worked out under a partial exemption method. Reclaiming everything by default is an error HMRC finds quickly, because your sales pattern and your claims stop matching.

Where the UK VAT Calculator gets its figures

Rates, bands and thresholds follow published HMRC and gov.uk figures for the 2026/27 tax year, held in one table that every tool reads. April arrives, the table changes, and the results move together.

Earlier years stay available through the year selector, so a late self assessment runs on the numbers that applied at the time rather than today's.

Some cases still need an accountant. K codes carrying negative allowances, bespoke sacrifice arrangements, the annual allowance taper for very high earners, and anything involving two employments at once.

About this calculator

The UK VAT Calculator adds or removes the 20% standard rate of Value Added Tax for the 2026/27 tax year. Enter a net price to see the VAT-inclusive total, or a gross price to strip VAT back out and find the net amount.

Frequently asked questions

What is the current VAT rate in the UK?+

The standard UK VAT rate is 20% and has been since January 2011. A reduced rate of 5% applies to things like home energy and children's car seats, while most food, books and children's clothes are zero-rated.

How do I add 20% VAT to a price?+

Multiply the net price by 1.2. For example, £1,000 plus VAT is £1,000 × 1.2 = £1,200, of which £200 is VAT. Use the 'Add VAT' mode above and the calculator does it instantly.

How do I remove VAT from a gross price?+

Divide the gross price by 1.2 to get the net amount, then subtract to find the VAT. For example, £1,200 ÷ 1.2 = £1,000 net, so the VAT is £200. The 'Remove VAT' mode handles this in one step.

When must a business register for VAT?+

You must register once your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period, not just the tax year. You can also register voluntarily below the threshold to reclaim VAT on purchases.

What is the difference between VAT inclusive and exclusive prices?+

VAT-exclusive (net) is the price before tax is added, used mainly in business-to-business quotes. VAT-inclusive (gross) is the final price the customer pays, which is what consumers normally see on price tags.

Can I reclaim VAT as a small business?+

If you are VAT-registered you can reclaim the VAT you pay on business purchases and expenses by offsetting it against the VAT you charge customers. You cannot reclaim VAT if you are not registered.

Which goods are zero-rated or exempt from VAT?+

Zero-rated items include most food, books, newspapers and children's clothing. Exempt supplies include insurance, finance, education and health services. Zero-rated and exempt sound similar but affect VAT recovery differently.