UK VAT Calculator 2026
Add VAT to a net price or work out the VAT in a gross (VAT-inclusive) price.
✓ Standard 20% · Reduced 5% · Zero 0% — UK rates
How to Work Out VAT
VAT (Value Added Tax) in the UK is charged at a standard rate of 20%. To add VAT to a net price, multiply it by 1.20. To remove VAT from a VAT-inclusive (gross) price, divide by 1.20 — not subtract 20%, which is a common mistake. For example, £120 including 20% VAT contains £20 of VAT (£120 ÷ 1.2 = £100 net), not £24.
UK VAT Rates 2026
| Rate | % | Applies to (examples) |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Domestic energy, children's car seats, some home improvements |
| Zero | 0% | Most food, books, newspapers, children's clothing |
| Exempt | — | Insurance, postage stamps, financial & property transactions |
Always check the current rate and category for your goods on GOV.UK.
Worked Example: £1,000 + VAT
A tradesperson quotes £1,000 for a job "plus VAT". At the 20% standard rate, the VAT is £200, so the customer pays £1,200 in total. If instead the quote was £1,000 "including VAT", the VAT already inside that price is £166.67 (£1,000 ÷ 1.2 = £833.33 net), and the business keeps £833.33. Getting these two the wrong way round is the single most common VAT error on invoices.
Common VAT Mistakes to Avoid
- Subtracting 20% to remove VAT. Taking 20% off a gross price is wrong. £120 minus 20% is £96, but the correct net is £100 (£120 ÷ 1.2). Always divide by 1.2, don't subtract.
- Confusing zero-rated and exempt. Zero-rated goods are taxable at 0% and a business can still reclaim its input VAT; exempt goods are outside VAT entirely and input VAT generally cannot be reclaimed.
- Forgetting the registration threshold. Once VAT-taxable turnover passes the threshold (£90,000), registration is compulsory — missing it can mean backdated VAT and penalties.
- Applying VAT to VAT-inclusive prices. Adding 20% to a price that already includes VAT double-charges the tax.
Frequently Asked Questions
How do I remove VAT from a price?
Divide the VAT-inclusive (gross) price by 1.20 for the standard 20% rate to get the net price. The difference between the gross and net is the VAT. For the 5% rate, divide by 1.05.
How much VAT is in £100?
If £100 already includes 20% VAT, the VAT element is £16.67 (£100 ÷ 1.2 = £83.33 net, so £16.67 VAT). If you are adding 20% VAT to a £100 net price, the VAT is £20 and the total is £120.
What is the VAT registration threshold?
A business must register for VAT once its VAT-taxable turnover exceeds the registration threshold (£90,000 as of 2024, the latest confirmed figure). You can also register voluntarily below the threshold to reclaim VAT on purchases.
Is VAT the same as sales tax?
They are similar consumer taxes but VAT is collected at each stage of the supply chain, with businesses reclaiming VAT on their inputs, whereas US-style sales tax is charged only at the final sale.
Can I claim VAT back?
VAT-registered businesses can reclaim the VAT they pay on eligible business purchases (input VAT) by offsetting it against the VAT they charge customers (output VAT). Consumers and non-registered businesses generally cannot reclaim VAT.
Is there VAT on second-hand goods?
Often yes, but many second-hand items are sold under the VAT Margin Scheme, where VAT is charged only on the seller’s profit margin rather than the full selling price — which is why used-goods dealers may not show VAT separately.
📖 Read the guide
UK VAT rates explained
What to work out next
⚠️ Disclaimer: Results are estimates only and do not constitute financial, tax, or legal advice. Tax laws change frequently — always verify with official sources (IRS, HMRC) and consult a qualified professional before making decisions.
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