Reverse VAT Calculator
Reverse VAT calculator for the UK. Enter a gross amount and instantly see the net price and VAT element.
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A reverse VAT calculator works backwards from a gross (VAT-inclusive) price to show the net amount and VAT element separately. Useful for receipts that show only the total.
The formula is Net = Gross ÷ (1 + VAT rate). At 20%, Net = Gross ÷ 1.20.
What this calculator does
Takes a VAT-inclusive total and works backwards to the net amount and the VAT element, so you can see how much of a till price, receipt or invoice total is actually revenue.
Who it is for
- Operators converting daily till takings into net sales for the weekly P&L.
- Bookkeepers reconciling receipts that only show a gross total.
- Anyone who has been given an 'all-in' price and needs to know the VAT to reclaim.
How to use it
- Enter the gross, VAT-inclusive total.
- Set the rate that applies to that supply - 20% for most standard-rated sales.
- Read the net amount (your revenue) and the VAT element separately.
The formula
- Net = Gross / (1 + Rate / 100)
- VAT = Gross - Net
- At 20%: Net = Gross / 1.2 and VAT = Gross / 6.
Worked example
A table's bill comes to £180.00 including VAT and you want the net sales figure for your revenue report.
- Gross = £180.00
- Net = £180.00 / 1.2 = £150.00
- VAT = £180.00 - £150.00 = £30.00 (which is also £180 / 6)
£150.00 is sales revenue and £30.00 is VAT collected for HMRC.
How to read your result
- The net figure is the number to use in every margin, GP and food cost calculation.
- The VAT element is a liability, not profit, so it should never appear in your gross profit line.
- If your net figure is higher than expected, check the rate - a zero-rated cold takeaway sale has no VAT to remove at all.
What to do next
- Set your EPOS reporting to show net sales by category so you are not reverse-calculating by hand each week.
- Reverse the VAT out of supplier invoices before comparing cost prices between suppliers.
- Check your menu GP again on net prices - many sites discover their real GP is several points below what they thought.
Common mistakes to avoid
- Multiplying the gross by 0.8 instead of dividing by 1.2.
- Applying 20% to mixed baskets where some lines are zero-rated.
- Forgetting service charge treatment - a genuinely discretionary tip is outside the scope of VAT, so it should not be in the figure you reverse.
Assumptions and limitations
- Arithmetic only; it does not determine whether a supply is standard, reduced or zero-rated.
- Mixed-rate totals must be split by rate before being reversed.
- General information, not tax advice.
Sources
Dumb Bambi provides general business information, not accounting, tax or legal advice. Read our calculation methodology or tell us about a mistake.
Last reviewed:
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Frequently asked questions
Why use a reverse VAT calculator?+
When a supplier gives you only a gross price, you may need the VAT element for accounting or reclaim.
Can I use this for the 5% reduced rate?+
Yes - change the rate to 5% and it will calculate the reverse VAT correctly.