A fast, deterministic UK VAT calculator for sole traders, freelancers, and businesses. Easily add VAT to net prices or reverse VAT from gross totals using official HMRC rates (20% standard, 5% reduced, and 0% zero-rate).
Enter the base net price to calculate how much VAT to charge.
Net to Gross Formula:
VAT = £100.00 × (20% ÷ 100) = £20.00
Gross = £100.00 + £20.00 = £120.00
Whether you are issuing a tax invoice or extracting VAT from a till receipt, use these exact mathematical formulas specified in HMRC Notice 700:
VAT Amount = Net Amount × (VAT Rate / 100)
Gross Total = Net Amount × (1 + VAT Rate / 100)
Example: For a £100 net consulting fee at the 20% standard rate:
VAT = £100 × 0.20 = £20.00 | Gross = £100 × 1.20 = £120.00
Net Amount = Gross Total / (1 + VAT Rate / 100)
VAT Amount = Gross Total × (Rate / (100 + Rate))
Example: For a £120 gross receipt using the statutory VAT fraction (1/6):
VAT = £120 × (1/6) = £20.00 | Net = £120 / 1.20 = £100.00
Value Added Tax (VAT) is a consumption tax charged on taxable supplies of goods and services in the United Kingdom. VAT-registered businesses charge VAT to their customers and pay it to HM Revenue & Customs (HMRC), while reclaiming the VAT they paid on their own business purchases.
It is critical to distinguish between 0% Zero-Rated and VAT Exempt supplies. With 0% zero-rated goods, sales count towards your VAT registration threshold, and you can reclaim input tax paid on related costs. With exempt items (such as insurance, financial services, and health services), no VAT is charged, but businesses cannot reclaim input tax related to those sales.
Quick reference calculations for standard 20% VAT and reduced 5% VAT across standard invoice figures:
| Net Price | 20% Standard VAT | 20% Gross Total | 5% Reduced VAT | 5% Gross Total |
|---|---|---|---|---|
| £10.00 | £2.00 | £12.00 | £0.50 | £10.50 |
| £50.00 | £10.00 | £60.00 | £2.50 | £52.50 |
| £100.00 | £20.00 | £120.00 | £5.00 | £105.00 |
| £250.00 | £50.00 | £300.00 | £12.50 | £262.50 |
| £500.00 | £100.00 | £600.00 | £25.00 | £525.00 |
| £1,000.00 | £200.00 | £1,200.00 | £50.00 | £1,050.00 |
Learn the legal rules, mathematical formulas, and practical best practices behind these calculations.
Understanding Value Added Tax (VAT) in the UK is vital for any growing enterprise. This guide breaks down the statutory £90,000 registration threshold, rolling turnover rules, rate categories, and how to stay compliant with HMRC.
Extracting VAT from a gross total is a common task for bookkeepers and business owners. Simply deducting 20% from a receipt is mathematically incorrect and costs businesses thousands in tax errors. Learn the proper reverse formula.
The standard UK VAT rate is 20%, which applies to most goods and services. A reduced rate of 5% applies to select items (like home energy), and 0% applies to zero-rated goods (such as basic food and children’s clothing).
To extract standard 20% VAT from a gross amount, divide the gross total by 1.20 to find the net price, then subtract the net price from the gross total to determine the VAT portion.
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