VAT — Value Added Tax — is charged at 20% on most goods and services in the UK, with a reduced rate of 5% on things like home energy, and 0% on essentials such as food and children's clothing. Enter an amount and rate to add VAT to a net price or strip VAT out of a gross price.
Choose "Add VAT" when you have a price before tax (a trade price, or what a business charges before VAT) and need to know what the customer actually pays. The VAT amount is the net price multiplied by the rate — a £100 net price at 20% VAT adds £20, giving a £120 gross price.
Choose "Remove VAT" when you have a VAT-inclusive price and need to work out the underlying net amount — useful for reclaiming VAT on a purchase or checking a supplier invoice. This isn't simply subtracting the rate: a £120 gross price at 20% VAT has a net amount of £100, not £96, because the VAT was calculated on the net figure, not the gross one. The calculator divides by (1 + rate/100) to reverse this correctly.
The standard rate is 20%, covering most goods and services. The reduced rate of 5% applies to a specific list of items including home energy, children's car seats, and mobility aids. The zero rate (0%) applies to most food, books, newspapers, and children's clothing — these are still VAT-taxable in principle, just charged at 0%, which is different from being VAT-exempt (e.g. insurance, education, and postage stamps, which don't go through the VAT system at all).
This calculator applies a flat percentage and doesn't account for mixed-rate invoices (where some line items are standard-rated and others reduced or zero-rated), the VAT flat rate scheme for small businesses, or partial exemption rules. For anything beyond a straightforward single-rate calculation, check figures with your accountant or HMRC's own guidance.
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