Update — 6 October 2026: Domestic electricity in Great Britain is temporarily 0% VAT from 1 October 2026 to 31 March 2027 — not 5% during that period. Northern Ireland electricity stays at 5%, and other domestic fuel such as gas remains at 5%. See: VAT on Domestic Electricity Bills: 0% in Great Britain.
Most goods and services in the UK have VAT at 20%. But some things are charged at the reduced rate of 5%. If you sell or buy any of these, you need to work out VAT a little differently. This guide shows you the exact formulas — with simple examples — for adding 5% VAT to a price and taking 5% VAT off a total.
Definition: The reduced rate of VAT is a lower rate of VAT — currently 5% — that applies to certain goods and services, such as domestic fuel and power, instead of the standard rate of 20%.
You can also skip the maths and use our free VAT calculator — just pick the 5% rate.
Enter an amount, pick a rate, and see the full breakdown instantly.
Need more options? Use the full UK VAT Calculator — it's free.
Common items at 5% VAT in the UK include:
If you are not sure which rate applies to what you sell, check the official list of VAT rates on GOV.UK before you invoice.
Formula: Price × 1.05 = Price including VAT
VAT amount: Price × 0.05
You charge £200 for a children's car seat, before VAT.
Your customer pays £210, and £10 of that is VAT.
A home gas bill is £80 before VAT.
Note: the same £80 of domestic electricity used in Great Britain between 1 Oct 2026 and 31 Mar 2027 would be £80 in total, because the temporary rate for that electricity is 0%.
Sometimes you only have the total including VAT and need the amount before VAT — for example, when checking a bill or doing your bookkeeping.
Formula: Total ÷ 1.05 = Price before VAT
You paid £210 in total, including 5% VAT.
There is a shortcut for finding just the VAT inside a gross price. At 5%, the VAT is 1/21 of the total price.
(For comparison, at the standard 20% rate the VAT fraction is 1/6 of the total.)
| You want to… | Do this | Example (£200) |
|---|---|---|
| Add 5% VAT | Price × 1.05 | £210 total |
| Find the VAT amount | Price × 0.05 | £10 VAT |
| Remove 5% VAT | Total ÷ 1.05 | £210 → £200 net |
| Find VAT inside a total | Total × 1/21 | £210 → £10 VAT |
How do I calculate 5% VAT quickly?
Multiply by 1.05 to add VAT, or divide by 1.05 to remove it. Or use our VAT calculator and select the 5% rate — it shows the net amount, the VAT and the gross amount separately.
What is the VAT fraction for 5%?
1/21 of the VAT-inclusive price. Multiply the total by 1 and divide by 21 to get the VAT amount.
Is home electricity really only 5% VAT?
Not right now in Great Britain. Domestic electricity in England, Scotland and Wales is 0% from 1 October 2026 to 31 March 2027. In Northern Ireland it stays at 5%, and other domestic fuel and power (such as gas) is generally 5%, not 20%. Business energy is usually 20% (with some exceptions for small usage).
Can I use the same method for other rates?
Yes. For 20% VAT, multiply by 1.20 to add VAT and divide by 1.20 to remove it. The pattern is always the same: use 1 + the rate as a decimal.
Try it now: enter any amount in our free UK VAT calculator and choose the 5% rate to see the full breakdown instantly.
Related guides: How to Remove VAT from a Price (Reverse Calculation) · Current UK VAT Rates