Our VAT Calculator for UK helps users easily add or remove VAT from any entered amount using current HMRC rates. By selecting the correct VAT percentage and entering either the net or gross value, it instantly calculates the VAT amount and the final total. The calculator supports standard, reduced, and zero-rate VAT categories, ensuring accurate tax results for all situations. It is ideal for businesses, freelancers, and shoppers who need quick and reliable VAT computations for invoices, receipts, or price adjustments.
Add or remove 20% VAT instantly • 2025–26 rates • Net, VAT & Gross amounts
Value Added Tax (VAT) is applied to the majority of goods and services across the United Kingdom, and understanding how to calculate it accurately is essential for consumers, freelancers, shop owners, eCommerce sellers, and VAT-registered businesses. This VAT Calculator for the UK allows you to add VAT, remove VAT, or break down VAT amounts instantly—using the official UK VAT rates of 20%, 5%, and 0%.
Using the VAT Calculator is straightforward and does not require any registration or technical knowledge. If you want to add VAT to a price, you simply enter the net amount—the price before any tax—and choose the applicable rate. The most common rate in the UK is the standard 20% rate, but the calculator also supports the reduced 5% rate and the zero 0% rate used for specific items. Once you input your amount, the tool instantly displays the VAT added and the final total price including VAT. For example, if you enter £100 at the 20% rate, the calculator will immediately show a VAT amount of £20 and a total price of £120.
You can also use the calculator to remove VAT from a price that already includes tax. This feature is especially helpful when reviewing receipts, preparing invoices, or calculating the net price for accounting purposes. If a product costs £120 including 20% VAT, entering £120 and selecting the same VAT rate will show the net price as £100 and the VAT portion as £20. The calculator uses accurate VAT-extraction formulas that ensure the results match HMRC standards.
VAT, or Value Added Tax, is a consumption tax applied to most goods and services sold in the United Kingdom. It is charged at each stage of the supply chain, from manufacturers and wholesalers to retailers and service providers. Unlike income tax, which is paid by individuals on earnings, VAT is collected during transactions between businesses and consumers. When a business sells a product or service, it charges VAT on top of the net price, collects that tax from the customer, and later pays it to HMRC.
For consumers, VAT is typically included in the final price of goods and services, which is why most prices displayed in shops or online already include VAT. For businesses, however, VAT is something that must be recorded and declared properly. Businesses charge VAT on sales (known as output VAT), and they can also reclaim the VAT they pay on business expenses (known as input VAT). This system ensures that VAT is ultimately paid by the end consumer, not by the businesses operating within the supply chain. Read More About VAT Tax & Rate on Wikipedia.
VAT registration is required once your business turnover exceeds the official threshold set by HMRC. The current threshold is £90,000 in rolling 12-month revenue. If you expect to cross this amount within 30 days, you must register immediately. Businesses that do not track this properly may face penalties.
Although registration is mandatory at the threshold, many small businesses choose to register voluntarily even if their turnover is lower. Voluntary registration allows a business to reclaim VAT on purchases and claim input VAT credits on equipment, materials, and operational expenses. It can also increase business credibility, especially when dealing with clients who themselves are VAT-registered.
Sole traders, freelancers, limited companies, partnerships, and online sellers operating platforms such as Amazon, Etsy, Shopify, or WooCommerce may all be required to register for VAT depending on their revenue and operations. Once registered, businesses must charge VAT on their services and file VAT returns using Making Tax Digital (MTD) compatible software.
The calculator makes VAT calculations instant, but knowing the formulas can help you verify results or manually check invoices. To add VAT at the 20% rate, multiply the net price by 1.20. For example, £50 becomes £60 after adding 20% VAT. For the reduced rate of 5%, multiply the net amount by 1.05.
Removing VAT is slightly more complex because tax is already included in the total price. To extract VAT from a price that includes 20% tax, divide the amount by 1.20. For example, £120 including VAT becomes £100 net. The VAT amount is then the difference between the total price and the net price. The same logic applies for the 5% rate using the divider 1.05.
VAT refunds, also known as VAT reclaims, allow VAT-registered businesses to recover VAT paid on business-related expenses. This includes purchases such as tools, equipment, stock, travel costs, office supplies, software, and other items used for business purposes. When a business files its VAT return, it subtracts the input VAT it has paid from the output VAT it has collected from customers. If the input VAT is higher, the business can claim a refund from HMRC.
VAT reclaims are handled either through accounting platforms like QuickBooks, Xero, and Sage or directly through HMRC’s Making Tax Digital system. Keeping accurate VAT records ensures businesses pay only the correct amount of VAT and do not lose money through missed claims.