20%
The standard rate of VAT in the UK is 20%. It applies to most goods and services, including electronics, clothing for adults, restaurant meals and professional services such as accountancy or consultancy fees.
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Common VAT Amounts at 20% — Quick Reference
To add 20% VAT, multiply the net price by 1.20. To remove 20% VAT, divide the gross price by 1.20. The table below shows the VAT amount and gross total for common UK prices at the standard 20% rate.
| Net amount | VAT at 20% | Gross (incl. VAT) |
|---|---|---|
| £50.00 | £10.00 | £60.00 |
| £100.00 | £20.00 | £120.00 |
| £150.00 | £30.00 | £180.00 |
| £250.00 | £50.00 | £300.00 |
| £500.00 | £100.00 | £600.00 |
| £750.00 | £150.00 | £900.00 |
| £1,000.00 | £200.00 | £1,200.00 |
| £1,500.00 | £300.00 | £1,800.00 |
How to Calculate VAT in the UK
VAT calculations in the UK use two simple formulas. To add VAT, multiply the net price by 1.20 (for 20%) or 1.05 (for 5%). To remove VAT, divide the gross price by 1.20 or 1.05. Here is each method, step by step.
How to add VAT to a price
- Start with the net amount — the price before VAT.
- Multiply the net amount by 0.20 to find the VAT (for the 5% reduced rate, multiply by 0.05 instead).
- Add the VAT to the net amount to get the gross price.
Gross = Net × 1.20
Example: £500 net × 1.20 = £600 gross (VAT = £100.00).
How to remove VAT from a price
- Start with the gross amount — the price including VAT.
- Divide the gross amount by 1.20 to find the net amount (for the 5% reduced rate, divide by 1.05).
- Subtract the net amount from the gross amount to find the VAT.
Net = Gross ÷ 1.20
Example: £600 gross ÷ 1.20 = £500 net (VAT = £100.00).
Pro tip: Never just subtract 20% from a gross price — 20% of the gross figure is more than the VAT it contains. Always divide by 1.20. Shortcut: the VAT inside any 20% gross price is exactly one-sixth of it (£600 ÷ 6 = £100).
Prefer not to do the maths? Use the calculator above — it applies both formulas instantly, rounds to the nearest penny, and lets you copy the result straight into your invoice or spreadsheet.
UK VAT Rates Explained: 20%, 5%, 0% and Exempt
The UK has three VAT rates — standard (20%), reduced (5%) and zero (0%) — plus exempt supplies that sit outside VAT entirely. The rate that applies depends on what is being sold.
5%
The reduced rate of 5% applies to a limited list of supplies, including domestic fuel and power, children's car seats, smoking-cessation products and some energy-saving materials installed in homes.
0%
Zero-rated items are charged VAT at 0%. They include most food and drink, books and newspapers, children's clothing and footwear, and public transport. The sale is still a taxable supply — VAT is simply charged at 0%.
Outside VAT
Exempt supplies are outside the VAT system altogether. Examples include insurance, postage stamps, most education and training, and financial services such as loans and credit.
Zero-rated vs exempt — the difference matters. A business selling zero-rated goods can still reclaim VAT on its costs; a business selling exempt supplies usually cannot. That one distinction can be worth thousands of pounds a year.
The VAT Flat Rate Scheme
The Flat Rate Scheme lets small businesses pay HMRC a fixed percentage of their gross turnover instead of tracking VAT on every purchase. You can join if your expected VAT-taxable turnover is £150,000 or less (excluding VAT), and the flat-rate percentage depends on your trade — for example, 14.5% for accountancy and 12.5% for journalists. Newly VAT-registered businesses get a further 1% discount in their first year. If your business spends little on goods, you may be classed as a "limited cost business" and pay 16.5% instead. The scheme simplifies record-keeping but can cost more if you buy a lot of VAT-able stock, so compare before you join.
Reverse Charge VAT — What It Means
Under a reverse charge, the customer — not the supplier — accounts for the VAT to HMRC. Since 1 March 2021, VAT-registered subcontractors in the construction industry no longer charge VAT on most building services covered by the Construction Industry Scheme (CIS); the VAT-registered contractor buying the service declares it on their own return instead. Reverse charge rules also apply to many B2B services bought from overseas suppliers. The tip the invoice: state that the domestic reverse charge applies, show the VAT amount the customer must account for, but charge £0 VAT.
VAT Registration Threshold
You must register for VAT if your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period, and you must tell HMRC within 30 days of the end of the month in which you crossed the threshold. The deregistration threshold is £88,000. You can also register voluntarily below the threshold — useful if you want to reclaim VAT on startup costs. Turnover is measured on a rolling basis, not by tax year, so check every month.
£90,000
Registration threshold (rolling 12 months)
£88,000
Deregistration threshold
30 days
To notify HMRC after crossing the threshold
UK VAT Calculator — Frequently Asked Questions
What is the current VAT rate in the UK?
The standard UK VAT rate is 20%. A reduced rate of 5% applies to items such as home energy and children's car seats, and a zero rate (0%) applies to most food, books and children's clothing. Some supplies, like insurance and education, are exempt from VAT entirely.
How do I add 20% VAT to a price?
Multiply the net price by 1.20. For example, £250 × 1.20 = £300, which includes £50 of VAT. You can also work out the VAT separately by multiplying the net price by 0.20, then add it on.
How do I remove VAT from a price?
Divide the gross (VAT-inclusive) price by 1.20 to get the net price, then subtract it from the gross to find the VAT. For example, £300 ÷ 1.20 = £250 net, so the VAT is £50. Never simply subtract 20% — that gives the wrong answer.
What is £500 plus VAT?
£500 plus 20% VAT is £600. The VAT element is £100 (£500 × 0.20). At the reduced 5% rate, £500 plus VAT would be £525. Our calculator above shows the net, VAT and gross for any amount.
How much VAT is inside a VAT-inclusive price?
At the 20% rate, the VAT inside a gross price is exactly one-sixth of it. For example, £120 ÷ 6 = £20 of VAT, leaving £100 net. For 5% items, divide the gross price by 21 instead.
What is the difference between zero-rated and VAT-exempt?
Zero-rated supplies are taxable at 0%, so the seller can usually reclaim VAT on related costs. Exempt supplies — such as insurance and most financial services — fall outside VAT, and the seller normally cannot reclaim VAT on associated expenses.
When do I need to register for VAT?
You must register when your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period, notifying HMRC within 30 days. You may deregister if turnover falls below £88,000. Voluntary registration is allowed at any level of turnover.
What is the VAT Flat Rate Scheme?
A simplified scheme where you pay HMRC a fixed percentage of your gross turnover (trade-dependent, e.g. 14.5% for accountancy, with a 16.5% rate for "limited cost" businesses). You can join if turnover is £150,000 or less excluding VAT and leave if it rises above £230,000.
What is the reverse charge for VAT?
A rule where the customer, not the supplier, accounts for the VAT. Since March 2021 it applies to most VAT-registered building and construction services within the UK (alongside CIS), and to many B2B services purchased from overseas businesses.
Does HMRC provide an official VAT calculator?
HMRC does not publish a general-purpose VAT calculator. GOV.UK explains the maths and offers specific tools, such as for the Flat Rate Scheme, but for everyday add-or-remove calculations a free online calculator like this one is the quickest option.
Can I use this calculator for the 5% reduced rate or custom rates?
Yes. Tap the 5% chip for reduced-rate items such as domestic fuel and children's car seats, or choose Custom to enter any rate between 0% and 50%. The results update instantly as you type.
How should VAT amounts be rounded?
The usual convention is to round to the nearest penny, which this calculator does. HMRC also permits rounding the total VAT on an invoice down to the nearest 0.1 of a penny (VAT Notice 700, section 17.5), so a business may round down if it prefers.
How We Keep This Accurate
Rates and thresholds are checked against GOV.UK guidance: VAT rates · VAT registration thresholds · VAT Notice 700. Calculations use the standard commercial formulas shown above and round to the nearest penny.
This page was reviewed on 24 July 2026 by the CalculateVAT.co.uk editorial team. CalculateVAT.co.uk is an independent tool and is not affiliated with HMRC. Spot an error? Contact us and we'll fix it.