Definition: To calculate VAT is to work out the Value Added Tax in a price, so you can split any figure into its three parts: the net amount (the price before VAT), the VAT itself, and the gross amount (net plus VAT — the total actually paid). The calculation always starts from the rate that applies to what is being sold — 20% standard, 5% reduced or 0% zero rate in the UK — and every formula on this page is just those three figures rearranged.
You do not have to do any of this by hand. The mini calculator below — and the full free VAT calculator on our homepage — add or remove VAT at 20%, 5% or 0% in one step and show the net, the VAT and the gross side by side.
Enter an amount, pick the VAT rate, and say whether you want to add VAT to it or take VAT out of it — see the net, the VAT and the gross.
Need more options? Use the full UK VAT Calculator — it's free.
| You have | You want | At 20% | At 5% | At 0% |
|---|---|---|---|---|
| Net price | Gross price (add VAT) | Net × 1.2 | Net × 1.05 | Net (unchanged) |
| Net price | Just the VAT to add | Net × 0.20 | Net × 0.05 | £0 |
| Gross price | Net price (remove VAT) | Gross ÷ 1.2 | Gross ÷ 1.05 | Gross (unchanged) |
| Gross price | Just the VAT inside it | Gross × 1/6 | Gross × 1/21 | £0 |
Where do 1.2 and 1.05 come from? They are simply "the price itself (1) plus the rate" — 1 + 0.20 = 1.2 at the standard rate, and 1 + 0.05 = 1.05 at the reduced rate. The fractions in the last row are explained in the VAT-part section below; they are the shortcut most accountants use daily.
Use this when you have a price before VAT — a quote, a fee or a selling price you have set — and need the total the customer will pay.
You quote £250 net for a job at the standard rate.
A reduced-rate supply is priced at £80 net.
For the reduced rate in full — which items use it and how the working changes — see our guide to calculating VAT at 5%.
Use this when the only figure you have already includes VAT — a till receipt, a supplier invoice total, a shop price — and you need the net figure, for example to reclaim the VAT or to record the purchase in your books. This is the direction people search for as "how to calculate VAT from gross" or "working out VAT backwards".
A supplier's invoice total is £300 including VAT at 20%.
A bill comes to £105 including VAT at the reduced 5% rate.
This direction has its own common trap — taking a percentage of the gross — covered in the mistakes section below, and a full guide of its own: how to remove VAT from a price.
Often you do not need the net at all — only the VAT figure itself, for a return or a reclaim. There is a fraction shortcut, and it is worth understanding rather than memorising:
A receipt total is £480 including VAT at 20%.
And at 5%: a £210 gross total holds £210 × 1/21 = £10 of VAT, on a net of £200.
The rate is set by what is sold, not by who sells it. HMRC's standard summary:
| Rate | Applies to (examples) | Multiplier |
|---|---|---|
| 20% — standard rate | Most goods and services | × 1.2 |
| 5% — reduced rate | Some goods and services, including domestic fuel and power and energy-saving materials | × 1.05 |
| 0% — zero rate | Most food, children's clothes, books and newspapers | × 1.0 (no VAT added) |
| Exempt | Insurance, finance, health and education services, for example | No VAT charged at all |
Two distinctions matter. Zero-rated is not the same as exempt: zero-rated sales are still taxable sales at a 0% rate — they count towards your turnover for VAT registration — while exempt sales do not. And you only charge VAT at all if you are VAT-registered (broadly, when taxable turnover passes the £90,000 registration threshold); our registration threshold guide explains that test, and the current VAT rate page tracks the rates themselves.
Check an unfamiliar item against GOV.UK's VAT rates page before you price it — applying 20% to a zero-rated item overcharges your customer, and the reverse undercharges HMRC.
Everything above comes together on a VAT invoice, which must show the net, the VAT and the total separately. Say you invoice a client for design services and printed materials, both at the standard 20% rate:
| Invoice line | Net |
|---|---|
| Design services | £500.00 |
| Printed materials | £250.00 |
| Net total | £750.00 |
| VAT at 20% (£750 × 0.20) | £150.00 |
| Invoice total to pay (£750 × 1.2) | £900.00 |
Check the three figures tie up: £750 net + £150 VAT = £900 gross ✓. Each line follows the same pattern — if an invoice mixes rates (say 20% goods with a 5% line), calculate the VAT line by line at each line's own rate, then add the VAT amounts together for the invoice total. The customer needs this breakdown to reclaim the VAT, and your own records need it for your VAT return.
This guide is general information, not tax advice. Rates are as published by HMRC; if a supply mixes rates or sits near a category boundary, check the GOV.UK guidance or take advice for your own position.
What is the formula to calculate VAT?
To add VAT: gross = net × (1 + rate) — at 20%, multiply the net price by 1.2. To remove VAT: net = gross ÷ (1 + rate) — at 20%, divide by 1.2. To find just the VAT in a gross price at 20%, divide the gross by 6.
How do I calculate VAT from a gross price?
Divide the gross price by 1.2 at the standard 20% rate (by 1.05 at 5%). A gross price of £300 divides to £250 net, so the VAT inside it is £50. Never take 20% of the gross figure itself — that overstates the VAT.
How much VAT is in £100?
If £100 is a VAT-inclusive price at 20%, it contains £100 ÷ 6 = £16.67 of VAT, on a net of £83.33. If £100 is the net price, the VAT added is £100 × 0.20 = £20, and the gross total is £120.
Why is the VAT fraction 1/6 at 20% and 1/21 at 5%?
Because the VAT percentage is charged on the net price, not the gross. At 20%, the gross is 120 parts of which 20 are VAT — 20/120 simplifies to 1/6. At 5%, the gross is 105 parts of which 5 are VAT — 5/105 simplifies to 1/21.
Do I charge VAT on everything I sell?
No. Most goods and services carry the standard 20%, some carry the reduced 5% or the zero rate, and a few — like insurance and health services — are exempt, with no VAT charged. And you only charge VAT at all if your business is VAT-registered; check GOV.UK's VAT rates page for the rate on anything unfamiliar.
How do I add VAT to a price quickly?
Multiply by 1.2 for the standard rate: a £60 net price becomes £60 × 1.2 = £72 including £12 of VAT. For any other figure or rate, the mini calculator near the top of this page — or the full calculator on our homepage — does it in one step.
Add or remove VAT on any figure in seconds with our free UK VAT calculator.
Related guides: How to Remove VAT from a Price · VAT Inclusive vs Exclusive Prices · How to Calculate VAT at 5% · Current VAT Rate in the UK