VAT Calculator UK — Free 2026
Instantly add or remove VAT at the standard rate (20%), reduced rate (5%), or a custom rate. See net, VAT and gross amounts.
How It Works
- Enter an amount
- Choose add or remove VAT
- View the breakdown
Understanding UK VAT
Value Added Tax (VAT) is a consumption tax charged on most goods and services sold in the UK. Businesses registered for VAT must charge it on their sales and can reclaim VAT paid on business purchases. The current standard rate has been 20% since January 2011.
UK VAT Rates
| Rate | Percentage | Examples |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Domestic energy, sanitary products, child car seats |
| Zero | 0% | Most food, children's clothing, books, newspapers |
VAT Registration Threshold
You must register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period. Once registered, you must charge VAT on sales and submit VAT returns (usually quarterly). You can voluntarily register below the threshold, which allows you to reclaim input VAT.
Quick VAT Formulas
- Add VAT: Gross = Net × 1.20 (at 20%)
- Remove VAT: Net = Gross ÷ 1.20; VAT = Gross ÷ 6
- General: VAT = Amount × (Rate ÷ (100 + Rate)) when removing
Common VAT Exemptions and Zero-Rated Items
Not all goods and services attract the standard 20% rate. Understanding which rate applies is important for businesses and consumers alike. Zero-rated items (0% VAT) include most unprocessed food, children's clothing and footwear, books and newspapers, and public transport. Reduced rate items (5% VAT) include domestic gas and electricity, children's car seats, smoking cessation products, and energy-saving materials installed under government schemes.
Some services are VAT-exempt rather than zero-rated — this distinction matters for businesses because exempt supplies do not allow input VAT recovery. Exempt items include insurance, financial services, education, health services, and burial and cremation services. If your business supplies both taxable and exempt items, you may need to use partial exemption calculations.
Making Tax Digital for VAT
Since April 2022, all VAT-registered businesses must keep digital records and file VAT returns using Making Tax Digital (MTD) compatible software. This means spreadsheets alone are no longer sufficient — you need either dedicated accounting software or a bridging tool that connects spreadsheets to HMRC's API. Popular MTD-compatible tools include Xero, QuickBooks, FreeAgent, and Sage. For a complete picture of your UK tax obligations, use our UK Salary Calculator.
Frequently Asked Questions
The standard UK VAT rate is 20%. A reduced rate of 5% applies to certain goods and services such as domestic energy, children's car seats and sanitary products. Some items are zero-rated (0%) including most food, children's clothing and books.
To find the VAT included in a gross price at 20%, divide the gross amount by 6. For example, if an item costs £120 including VAT, the VAT is £120 ÷ 6 = £20, and the net price is £100. The formula is: VAT = gross × (rate ÷ (100 + rate)).
You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month period (the threshold from April 2024). You can voluntarily register below this threshold. VAT-registered businesses must charge VAT on sales and can reclaim VAT on business purchases.
The Flat Rate Scheme lets small businesses (turnover under £150,000) pay a fixed percentage of gross turnover as VAT, rather than calculating VAT on each transaction. The percentage varies by business type. It simplifies VAT accounting but may not always save money.
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