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    KnowTheCost.co.uk
    Content reviewed · 2026/27 tax year

    UK VAT Calculator

    Quickly add or remove VAT from any amount using the standard 20% rate, reduced 5% rate, or a custom percentage. Perfect for invoices, quotes, and expense claims.

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    Whether you're pricing a product, checking an invoice, or working out how much VAT you've paid on a purchase, this calculator gives you an instant breakdown. It handles both directions – adding VAT to a net figure or extracting VAT from a gross amount.

    A surprisingly common error is removing VAT by calculating 20% of the gross total. This overstates the VAT. The correct method is to divide by 1.20, which this calculator does automatically.

    VAT Calculator

    Add or remove VAT at the standard, reduced, or custom rate

    VAT Breakdown

    VAT rate: 20%

    Total including VAT

    £1,200.00

    VAT amount: £200.00

    Amount excl. VAT£1,000.00
    VAT (20%)£200.00
    Total incl. VAT£1,200.00

    Quick Reference: Common Amounts

    VAT at 20% on popular amounts

    £100 + VAT

    £120.00

    VAT: £20.00

    £500 + VAT

    £600.00

    VAT: £100.00

    £1,000 + VAT

    £1,200.00

    VAT: £200.00

    £5,000 + VAT

    £6,000.00

    VAT: £1,000.00

    Understanding UK VAT

    Value Added Tax (VAT) is a consumption tax charged on most goods and services sold in the UK. If you're a business owner, freelancer, or simply want to understand the VAT on your purchases, knowing how to calculate it correctly is essential.

    The most common mistake when removing VAT is calculating 20% of the VAT-inclusive price. For example, 20% of £120 is £24 – but the actual VAT content is only £20. Always divide by 1.20 (or 1.05 for reduced rate) to get the correct net figure.

    Businesses registered for VAT must charge it on their sales and can reclaim VAT on eligible business purchases. The difference between VAT charged and VAT reclaimed is paid to (or refunded by) HMRC, usually quarterly.

    Common Mistakes

    • •Removing VAT incorrectly – Don't calculate 20% of the gross. Divide by 1.20 instead.
    • •Mixing up exempt and zero-rated – Zero-rated businesses can reclaim input VAT; exempt businesses cannot.
    • •Missing the registration threshold – Monitor your rolling 12-month turnover, not just your annual accounts period.

    Frequently Asked Questions

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