Quick VAT reference
| Amount (ex VAT) | VAT at 20% | Total (inc VAT) |
|---|---|---|
| £50 | £10.00 | £60.00 |
| £100 | £20.00 | £120.00 |
| £250 | £50.00 | £300.00 |
| £500 | £100.00 | £600.00 |
| £1,000 | £200.00 | £1,200.00 |
| £5,000 | £1,000.00 | £6,000.00 |
| £10,000 | £2,000.00 | £12,000.00 |
How to calculate VAT
VAT (Value Added Tax) is a consumption tax added to the price of goods and services in the UK. The standard rate is 20%, but some items qualify for a reduced rate of 5% or are zero-rated (0%).
Adding VAT (20%)
Multiply the net amount by 1.20. For example, £500 x 1.20 = £600.
Removing VAT from a total
Divide the gross amount by 1.20 to get the net price. For example, £600 / 1.20 = £500.
Finding just the VAT amount
A quick shortcut: divide any VAT-inclusive total by 6 to find just the VAT portion. £600 / 6 = £100 VAT.
What is the 5% reduced rate for?
The reduced 5% VAT rate applies to domestic fuel and power, children's car seats, and some other specific goods and services. Household electricity in Great Britain has no VAT from 1 October 2026 to 30 June 2027, and energy-saving materials installed in homes are zero-rated until 31 March 2027, so neither takes 5% at the moment. See the UK VAT rates guide for the detail. Use the 5% option in the calculator above to check amounts at the reduced rate.
Worked examples
Each example below was run through the calculator above in Add VAT mode at the 20% standard rate. Figures are rounded to the nearest penny, as the calculator shows them.
A quote for £600 plus VAT
"Plus VAT" means the £600 is the net price. VAT at 20% adds £120.00, so the customer pays £720.00. If the trader is not VAT registered they cannot add VAT at all, and the price is £600. A quote that says £600 "including VAT" is a different deal: the net price inside it is £500, as the next example shows.
Taking VAT off a £600 receipt
A net price of £500 plus £100.00 of VAT gives a total of £600.00. Read backwards, a £600 receipt that includes VAT holds £100 of VAT and £500 of net cost, so £100 is the figure a VAT-registered buyer can reclaim. Taking 20% off £600 would give the wrong answer, because 20% of the total is more than the VAT in it. Use Remove VAT mode for this.
Pennies on a small item: £19.99 before VAT
20% of £19.99 is a fraction of a penny under £4, which the calculator rounds to £4.00 for a total of £23.99. On a VAT invoice, HMRC lets you round the total VAT down to the whole penny instead, which can leave your invoice a penny below this result. Both are acceptable; the difference comes from the rounding rule, not the rate.
Rules that change the answer
Which rate applies
Most goods and services are standard rated at 20%. Some, such as children's car seats, take the reduced 5% rate, and most food and children's clothes are zero rated. The standard rate has been 20% since 4 January 2011 (GOV.UK: VAT rates, checked 30 October 2026).
Zero rated is not the same as exempt
Both mean no VAT on the price, but zero-rated sales count towards your taxable turnover and let you reclaim VAT on related costs. Exempt items, such as postage stamps and most financial and property transactions, do neither: HMRC's VAT guide says you cannot reclaim VAT on costs that relate to exempt supplies. That difference matters when you check whether you have passed the registration threshold.
The VAT fraction
HMRC's VAT guide sets out the VAT fraction for prices that already include VAT: the rate divided by 100 plus the rate. At 20% that is one-sixth of the total; at 5% it is one twenty-first (HMRC VAT guide, Notice 700, section 7.3.1, checked 30 October 2026). The same notice, section 17.5, allows invoice traders to round the total VAT on an invoice down to a whole penny.
Who can charge VAT
Only VAT-registered businesses can add VAT. Registration is compulsory once taxable turnover for the last 12 months goes over £90,000, or if you expect it to pass £90,000 in the next 30 days alone (GOV.UK: Register for VAT, checked 30 October 2026). Our VAT threshold calculator tracks the rolling 12-month figure.
Common mistakes
Removing VAT by subtracting 20%. On a VAT-inclusive total, divide by 1.2, or take one-sixth to find the VAT. Subtracting 20% removes too much.
Mixing up "plus VAT" and "including VAT". On a £600 quote the gap between the two readings is £120 to the customer, as the first two examples show. Check which one a quote means before you accept it.
Rounding each line differently from the total. If you work out VAT line by line, round each line consistently. Rounding every line up can overcharge across a long invoice. The how to calculate VAT guide covers line-by-line invoices.
How this calculator works: in Add VAT mode it multiplies your figure by the rate; in Remove and Reverse modes it divides the total by one plus the rate and treats the rest as VAT. Results are rounded to the nearest penny. Rates were checked against GOV.UK on 30 October 2026, and every source is listed on our methodology page.