VAT Calculator UK – Add or Remove VAT at 20%, 5% or 0%

Use this to add VAT to a price or take it off a price that already includes it, at 20%, 5% or 0%. Choose “Add VAT” if you have a net price, for example when writing an invoice. Choose “Remove VAT” if you have a VAT-inclusive total, like a receipt, and want to know how much of it is VAT.

Adding VAT

Multiply the net price by the VAT rate, then add it on. At 20%, £500 net becomes £600: £100 of VAT. The quicker way is to multiply by 1.2 (or 1.05 for the 5% rate).

Removing VAT: why you can’t just take off 20%

This is the mistake we see most. If a price of £600 includes 20% VAT, taking 20% off gives £480, which is wrong. The 20% was added to the net price, not the total, so you have to divide: £600 ÷ 1.2 = £500, meaning the VAT is £100.

A handy shortcut: at 20%, the VAT inside any VAT-inclusive price is exactly one-sixth of it. £600 ÷ 6 = £100. At 5%, it’s one twenty-first.

Amount	Add 20% VAT	VAT added	Remove 20% VAT	VAT included
£100	£120.00	£20.00	£83.33	£16.67
£250	£300.00	£50.00	£208.33	£41.67
£500	£600.00	£100.00	£416.67	£83.33
£1,000	£1,200.00	£200.00	£833.33	£166.67

UK VAT rates

Rate	Applies to
20% standard	Most goods and services
5% reduced	Some items, such as domestic energy and children’s car seats
0% zero	Some items, such as most food and children’s clothes

Zero-rated isn’t the same as exempt. Zero-rated sales are still VAT-taxable, they’re just charged at 0%, and they count towards the registration threshold. Exempt sales, like most insurance and some education, aren’t taxable at all. Which rate applies to a particular product can be surprisingly specific, so check HMRC’s list of VAT rates if you’re unsure.

On 5% at a glance: £500 net plus 5% is £525, and £525 ÷ 1.05 takes you back to £500.

When do you have to register for VAT?

You must register if your VAT-taxable turnover over the last 12 months goes above £90,000, or if you expect it to go over £90,000 in the next 30 days alone. It’s a rolling 12 months, not your accounting year, which is how a lot of growing businesses end up registering late. You can register voluntarily below the threshold, which can make sense if most of your customers are VAT-registered businesses that can reclaim it. See GOV.UK for details.

The Flat Rate Scheme

If your VAT-taxable turnover is £150,000 or less (excluding VAT), you can join the Flat Rate Scheme. You still charge customers 20%, but instead of working out VAT on every sale and purchase, you pay HMRC a fixed percentage of your VAT-inclusive turnover. In return, you generally can’t reclaim VAT on what you buy.

GOV.UK’s own example is a photographer on an 11% flat rate who bills £1,000 plus £200 VAT. They pay HMRC 11% of £1,200, which is £132, and keep the other £68. You get 1% off your flat rate in your first year of registration. If you’re a “limited cost business”, spending very little on goods (under 2% of turnover or under £1,000 a year), your rate is 16.5%, and the scheme rarely saves you anything.

To estimate it, add 20% VAT to your net sales with the calculator, then multiply the total by your sector’s flat rate.

Questions people ask

How do I remove 20% VAT from a price?

Divide the VAT-inclusive price by 1.2. For example, £600 ÷ 1.2 = £500, so the VAT is £100. Don’t subtract 20%, because that gives the wrong answer.

What is 20% VAT on £500?

£100, making £600 including VAT.

How do I work out VAT backwards at 5%?

Divide the gross price by 1.05. The difference between the gross and net price is the VAT.

What is the VAT registration threshold?

£90,000 of VAT-taxable turnover in any rolling 12-month period.

Is zero-rated the same as VAT exempt?

No. Zero-rated sales are VAT-taxable at 0% and count towards the registration threshold. Exempt sales aren’t taxable at all.

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