Use our free UK VAT calculator to instantly work out tax. Whether you need to calculate VAT from gross to find the net price, or add tax to your invoice, simply select the rate below. Remember, most goods are 20%, but items like children’s car seats are 5%.
Geographical Note: These rates apply to England, Scotland, Wales, and Northern Ireland. Business in Dublin? The Republic of Ireland uses a different system (23% Standard). Please use our [Irish VAT Calculator].
Current UK VAT Rates (2025/26)
Most transactions in the UK fall under the Standard Rate, but specific goods benefit from reduced rates.
VAT Rates & Applicability Guide
| Rate | Qualifying Goods & Services |
|---|---|
| Zero (0%) |
|
| Reduced (5%) |
|
❓ How do I know which rate applies?
Different products have different rules, and some qualify for reduced rates only in specific circumstances. Always check the official HMRC website or consult a qualified tax professional to be 100% sure.
How do I calculate VAT in the UK?
There are two main calculation methods depending on what you know:
- Adding VAT (Net to Gross): Multiply the net price by 1.2 for the standard 20% rate. Example: £100 × 1.2 = £120
- Removing VAT (Gross to Net): Divide the gross price by 1.2. Example: £120 ÷ 1.2 = £100
Formula of VAT Calculation
If you need to manually work out the tax for your spreadsheet or accounting software, use these formulas:
Mode 1: Forward Calculation (Net ➔ Gross)
To add 20% tax to a price.
- Formula: Net Price × 1.20
- Example: £100 × 1.20 = £120
Mode 2: Backwards VAT Calculation (Gross ➔ Net)
This is often called a deduct VAT calculator method. It allows you to work backwards from the total price.
- Formula: Gross Price ÷ 1.20
- Example: £120 ÷ 1.20 = £100
Examples for spreadsheet:
- To add 20% VAT:
=NetPrice*1.2 - To remove 20% VAT:
=GrossPrice/1.2 - To find VAT amount:
=GrossPrice-(GrossPrice/1.2)
The “Removing VAT” Mistake
When performing a backwards vat calculation manually, many people make the mistake of simply subtracting 20% from the total. This is mathematically incorrect.
Example: You spend £120 (Gross) and want to find the Net price.
- ❌ Wrong Method: £120 – 20% = £96. (This removes too much money).
- ✅ Correct Method: £120 ÷ 1.20 = £100. (This accurately separates the tax component (£20) from the net (£100)).
FAQ
What’s the quick mental math trick for 20% VAT?
Divide the gross total by 6 to find the VAT amount. Example: £120 ÷ 6 = £20 VAT. This works because 20% equals 1/6 of the total at a 1.20 multiplier.
What is the VAT registration threshold for 2025/26?
You must register for VAT if your turnover exceeds £90,000 in any rolling 12-month period.
How do I calculate VAT for my business invoices?
Display both the Net amount and the VAT amount on every invoice. Step-by-step:
- Determine the Net price (price before VAT)
- Multiply by the applicable VAT rate
- Add to get the Gross price
- Show all three figures on your invoice