Calculate VAT amount, pre-VAT price and total price with VAT.
VAT (Value Added Tax) is an indirect consumption tax levied on goods and services at each stage of production and distribution. Unlike sales tax which is collected only at the final sale, VAT is collected throughout the supply chain with businesses claiming credits for VAT already paid. Our VAT calculator handles both adding VAT to a price and removing VAT from a VAT-inclusive amount.
Price Including VAT = Net Price × (1 + VAT Rate/100). VAT Amount = Net Price × VAT Rate/100. Example: A service costing £500 net with 20% VAT: VAT Amount = £500 × 0.20 = £100. Total = £500 + £100 = £600.
When you have a VAT-inclusive price and need the net price: Net Price = Gross Price / (1 + VAT Rate/100). VAT Amount = Gross Price − Net Price. Example: An item costs £360 including 20% VAT: Net Price = £360/1.20 = £300. VAT = £360 − £300 = £60.
Standard Rate (20%): Most goods and services — electronics, clothing, professional services, restaurants. Reduced Rate (5%): Children's car seats, home energy, sanitary products, some social housing. Zero Rate (0%): Most food (not restaurant meals), children's clothing, books, newspapers, prescription medicines. Exempt: Financial services, insurance, education, healthcare — no VAT charged and no input VAT reclaimed.
UK businesses with turnover above £85,000 must register for VAT. Once registered, businesses charge VAT on sales (output tax) and reclaim VAT paid on business purchases (input tax). Only the net difference is paid to HMRC. This makes VAT ultimately a tax on the end consumer — businesses are just the collection agents throughout the supply chain.
VAT (Value Added Tax) is a consumption tax added at each stage of production and distribution. The end consumer ultimately pays the full VAT amount.
Sales tax is collected only at the final point of sale. VAT is collected at each stage of the supply chain, with businesses claiming back VAT paid on inputs.
Price including VAT = Net Price × (1 + VAT Rate/100). To remove VAT: Net Price = Gross Price / (1 + VAT Rate/100).
The standard VAT rate in the UK is 20%. A reduced rate of 5% applies to some goods like children's car seats and home energy. Some items are zero-rated.
