VAT Calculator UK
Add or remove Value Added Tax from any amount
✓ HMRC 2025–26
£
20%
Standard
5%
Reduced
0%
Zero
✎
Custom Rate
%
Enter an amount and press
Calculate VAT to see the full breakdown.
VAT Amount
£0.00
at 20% standard rate
UK VAT Rates — Quick Reference 2025–26
Official HMRC rates. Click a rate in the hero above to use it instantly.
20%
Standard Rate
Default rate for the vast majority of UK goods and services. If no specific exception applies, 20% is charged.
- Electronics & appliances
- Adult clothing & footwear
- Restaurants & hospitality
- Professional services
- Motor vehicles
- Software & digital services
- Alcohol & tobacco
5%
Reduced Rate
Applies to specific goods and services the government considers essential for health, welfare, or the environment.
- Domestic gas & electricity
- Children's car seats
- Energy-saving materials
- Solar panels & insulation
- Sanitary products
- Mobility aids (elderly)
- Some property renovations
0%
Zero Rate
Taxable at 0% — still reported on VAT returns. Businesses can reclaim input VAT on related costs.
- Most food & non-alcoholic drinks
- Books, newspapers & e-books
- Children's clothing & shoes
- Public transport
- Prescription medicines
- New residential buildings
- Exports outside the UK
How to Calculate VAT in the UK
There are three core VAT calculations every UK business and individual needs to know. Our calculator handles all of them — but understanding the maths helps you verify invoices and set prices correctly.
➕ Add VAT (Net → Gross)
VAT Amount =
Net × (Rate ÷ 100)
Gross Price =
Net + VAT Amount
Net × (Rate ÷ 100)
Gross Price =
Net + VAT Amount
£100 net × 20% = £20 VAT → £120 gross
➖ Remove VAT (Gross → Net)
Net Price =
Gross ÷ (1 + Rate ÷ 100)
VAT Amount =
Gross − Net Price
Gross ÷ (1 + Rate ÷ 100)
VAT Amount =
Gross − Net Price
£120 gross ÷ 1.20 = £100 net → £20 VAT
🔍 VAT Fraction (Quick Method)
At 20%: Gross × 1/6
At 5%: Gross × 1/21
Any rate:
Gross × Rate ÷ (100 + Rate)
At 5%: Gross × 1/21
Any rate:
Gross × Rate ÷ (100 + Rate)
£120 × 1/6 = £20 VAT (20% rate)
1
Identify the Correct VAT Rate for Your Supply
The UK has three main VAT rates: 20% standard (default for most goods/services), 5% reduced (domestic energy, children's car seats, energy-saving materials), and 0% zero rate (food, books, children's clothing). Some supplies are exempt (education, healthcare, insurance) — different from zero-rated, with different input VAT rules.
2
Know Whether Your Amount is Net or Gross
Business-to-business (B2B) prices are typically quoted excluding VAT (net). Consumer prices are usually including VAT (gross). Invoices must show both net amount, VAT amount, and gross total separately. Use Add VAT to get the consumer-facing price; Remove VAT to find the taxable net from a gross receipt or invoice.
3
Apply the Calculation or Use Our Calculator
To add 20% VAT: multiply net by 1.20. To remove 20% VAT: divide gross by 1.20. For 5%: multiply or divide by 1.05. Our calculator above handles all three official rates plus any custom rate, with support for quantity bulk calculations and instant copy-to-clipboard for invoicing.
4
Submit Your VAT Return via Making Tax Digital
VAT-registered businesses submit returns to HMRC — usually quarterly — via Making Tax Digital (MTD) compatible software. Your return shows total output VAT (charged to customers) minus input VAT (paid on business purchases). The net is paid to HMRC, or refunded if input exceeds output.
What is VAT? Complete UK Guide 2026
Value Added Tax (VAT) is a consumption tax charged at each stage of the supply chain. Here is everything UK businesses, freelancers and consumers need to know.
What is VAT?
VAT is a tax on the consumption of goods and services in the UK, administered by HMRC. VAT-registered businesses charge VAT on sales (output tax) and reclaim VAT on purchases (input tax). The net difference is paid to HMRC. Consumers ultimately bear the cost — businesses act as collectors on behalf of the government.
VAT Registration Threshold £90,000
Businesses must register for VAT once taxable turnover exceeds £90,000 in any rolling 12-month period (from 1 April 2024). Registration is also possible voluntarily below this threshold — beneficial if you incur significant input VAT or your clients are VAT-registered businesses. The deregistration threshold is £88,000.
Input VAT vs Output VAT
Output VAT is the VAT you charge customers on sales. Input VAT is the VAT you pay on business purchases. You deduct input VAT from output VAT on your VAT return. If input exceeds output, HMRC pays you a refund — a major advantage for zero-rated businesses such as food producers and exporters.
VAT Returns & Making Tax Digital (MTD)
Most businesses submit quarterly VAT returns to HMRC. Since April 2022, all VAT-registered businesses must use MTD-compatible software (Xero, QuickBooks, Sage, FreeAgent) to keep digital records and file returns. Manual filing is no longer allowed. MTD for Income Tax begins April 2026 for self-employed earners over £50,000.
VAT Flat Rate Scheme
Smaller businesses (turnover below £150,000 ex-VAT) can use the VAT Flat Rate Scheme (FRS). Instead of tracking every purchase, you pay HMRC a fixed percentage of gross turnover — rates vary by sector from 2% to 14.5%. You keep any difference between the flat rate and the 20% VAT charged — sometimes generating a net surplus.
Zero-Rated vs VAT Exempt — Key Difference
Zero-rated (0%) supplies are inside the VAT system — report them on returns and reclaim input VAT on related costs. Exempt supplies (healthcare, financial services, most education) are outside the VAT system — you cannot reclaim input VAT on related costs. Mixed-supply businesses must apply partial exemption rules.
UK VAT Rates by Category 2026
A quick reference guide to which VAT rate applies to the most common goods and services in the UK, based on HMRC rules for 2025–26.
| Category | VAT Rate | Common Examples | Key Notes |
|---|---|---|---|
| Most goods & services | 20% | Electronics, adult clothing, furniture, vehicles | Default rate — applies unless specific exception exists |
| Hospitality & catering | 20% | Restaurant meals, hotel stays, hot takeaways | Hot food and drinks are standard-rated |
| Professional services | 20% | Accountants, solicitors, IT, consultants | Standard rate; B2B cross-border: reverse charge |
| Digital & software | 20% | SaaS, apps, streaming, downloads | B2C: charge UK VAT; B2B overseas: reverse charge |
| Domestic fuel & power | 5% | Home gas, electricity, heating oil | Residential use only; commercial = 20% |
| Energy-saving materials | 5% | Solar panels, insulation, heat pumps | Reduced rate for residential installations |
| Children's car seats | 5% | Infant carriers, booster seats | Reduced rate |
| Sanitary products | 5% | Tampons, pads, menstrual cups | Reduced from 20% in January 2021 |
| Food & non-alcoholic drinks | 0% | Supermarket food, still water, juice | Exceptions: confectionery, crisps, alcohol = 20% |
| Books & newspapers | 0% | Physical books, e-books, newspapers | E-books zero-rated since May 2020 |
| Children's clothing | 0% | Clothes & shoes sized for under-14s | Small adult sizes may also qualify |
| Public transport | 0% | Bus, rail, ferry, flights | Taxi/private hire: 20% standard rate |
| Prescription medicines | 0% | NHS dispensed drugs | Over-the-counter medicines: 20% |
| Healthcare services | Exempt | NHS services, GP appointments, dentists | Cannot reclaim input VAT on exempt costs |
| Financial services | Exempt | Insurance, bank accounts, loans | Partial exemption rules may apply |
| Private school fees | 20% | Independent school tuition | Standard rate from January 2025 (was exempt) |
VAT Registration, Deadlines & HMRC Penalties
Missing VAT deadlines or registering late can lead to significant financial penalties. Here is what every UK business needs to know about compliance.
Late Registration Penalty
If you should have registered but did not, HMRC backdates VAT liabilities to when you should have registered. Penalties range from 5% to 15% of the net VAT owed, depending on delay length. Interest also accrues on unpaid VAT. Register as soon as you cross or forecast exceeding the £90,000 threshold.
VAT Return Deadlines
VAT returns are due one month and seven days after the end of each VAT period. Most businesses file quarterly. Payment must reach HMRC by the deadline — Direct Debit users get 3 extra days. Online filing is mandatory via MTD-compatible software. Postal filing is no longer accepted.
HMRC Penalty Points (2023+)
A penalty points system replaced the old surcharge system from January 2023. Each late submission earns a penalty point. Reach the threshold (4 points for quarterly filers) — a £200 fine. Further failures each add £200. Separately, VAT unpaid after 15 days incurs a 2% charge, rising to 4% after 30 days plus interest.
Making Tax Digital Compliance
All VAT-registered businesses must file via MTD-compatible software and maintain digital records with unbroken digital links. Copying VAT figures into a spreadsheet manually does not comply. HMRC requires compatible software such as Xero, QuickBooks, Sage, or FreeAgent to meet the digital link requirement.
Voluntary VAT Registration: Even below £90,000 turnover, voluntary registration can save money if you purchase significant VAT-liable goods or services. You reclaim input VAT on business costs — potentially thousands per year. However, you must then charge VAT on your sales, which can affect pricing competitiveness if customers are not VAT-registered.
Frequently Asked Questions
Clear answers to the most searched questions about UK VAT rates, registration, calculations, and HMRC compliance.