VAT Calculator
Free UK VAT calculator. Add VAT to a net price or remove VAT from a gross price at 20%, 5% or any custom rate.
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UK VAT is added to most goods and services. The standard rate is 20%, with a reduced rate of 5% for some items and zero rate for others. This calculator adds VAT to a net price or removes it from a gross price.
To add VAT, multiply by 1 + the rate (e.g. ×1.20 for 20%). To remove VAT, divide by 1 + the rate.
What this calculator does
Adds VAT to a net (VAT-exclusive) amount, or strips VAT out of a gross (VAT-inclusive) amount, at the standard 20% rate, the reduced 5% rate, the zero rate, or any custom rate you type in.
Who it is for
- VAT-registered sole traders and limited companies checking an invoice before it goes out.
- Restaurant, pub and bar operators converting till prices (which include VAT) into the net sales figure their P&L uses.
- Anyone quoting a job and unsure whether the price they have been given is net or gross.
How to use it
- Choose whether you are adding VAT to a net figure or removing VAT from a gross figure.
- Enter the amount exactly as you have it - do not round first.
- Set the rate. 20% is the UK standard rate; 5% applies to a small list of reduced-rate supplies; 0% applies to zero-rated goods such as most cold takeaway food.
- Read off the VAT element and the other side of the figure (net or gross).
The formula
- Adding VAT: VAT = Net x (Rate / 100), Gross = Net + VAT
- Removing VAT: Net = Gross / (1 + Rate / 100), VAT = Gross - Net
- At 20% the shortcut for removing VAT is Gross / 1.2, and the VAT element is Gross / 6.
Worked example
You are pricing a private dining package at a net £250 and need the VAT-inclusive figure to put on the customer quote.
- Net amount = £250.00
- VAT at 20% = £250.00 x 0.20 = £50.00
- Gross = £250.00 + £50.00 = £300.00
The customer pays £300.00, of which £50.00 is VAT you collect on HMRC's behalf and £250.00 is your sales revenue.
How to read your result
- The VAT element is never yours. It sits on your balance sheet until your return is filed.
- Your turnover, gross profit and food cost percentages should all be calculated on the net figure, not the gross one. Using gross sales flatters your margin.
- If the calculated gross looks odd against a supplier invoice, the rate is usually the cause - check whether the supply is standard, reduced or zero-rated.
What to do next
- Rebuild your menu price list with a net column next to the gross column so GP is always calculated on net.
- When a supplier quotes 'plus VAT', re-run the figure here before comparing it with a VAT-inclusive quote from a rival.
- If you are near the VAT registration threshold, model your prices both registered and unregistered before deciding to absorb or pass on the tax.
Common mistakes to avoid
- Deducting 20% from a gross figure. Removing 20% VAT from £300 is £300 / 1.2 = £250, not £300 - 20% = £240.
- Assuming everything in hospitality is 20%. Hot takeaway food and eat-in food are standard-rated, but most cold takeaway food is zero-rated.
- Calculating food cost percentage against a VAT-inclusive menu price, which understates food cost by a sixth.
Assumptions and limitations
- This tool performs arithmetic only. It does not decide the VAT liability of a supply, handle partial exemption, margin schemes or the flat rate scheme.
- Results are rounded for display; keep unrounded figures for your VAT return.
- General information, not tax advice. Check the rate that applies to your supply, or speak to your accountant.
Dumb Bambi provides general business information, not accounting, tax or legal advice. Read our calculation methodology or tell us about a mistake.
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Keep going with these tools
- Reverse VAT Calculator - Work out the net amount from a VAT-inclusive total.
- Markup Calculator - Calculate selling price from cost and markup %.
- Profit Margin Calculator - Work out gross profit and margin %.
Frequently asked questions
What is the current UK VAT rate?+
The standard rate is 20%. A reduced rate of 5% applies to items like domestic fuel, and a 0% rate applies to most food, children's clothes and books.
How do I add 20% VAT to a price?+
Multiply the net price by 1.20. For example, £100 × 1.20 = £120 gross, with £20 of VAT.
How do I remove VAT from a price?+
Divide the gross price by 1.20 to get the net. £120 ÷ 1.20 = £100 net, with £20 of VAT.
Is this calculator accurate for HMRC purposes?+
It uses the standard formulas HMRC uses, but always check your figures against your accounting software for filing.