To add value added tax (VAT) at 20 per cent, multiply the net price by 1.2. To remove it, divide the gross price by 1.2. To find the VAT already inside a gross price, divide that price by 6. Net means before VAT; gross means including VAT.
This UK VAT calculator shows all three amounts at the standard, reduced or zero rate. Choose your calculation, enter the price and select the rate. It does not decide which rate applies to your goods or services.
Formula for VAT
The general formula is net x (1 + rate) = gross, with the rate written as a decimal. To work backwards, use gross / (1 + rate) = net. The VAT amount is net x rate, or gross x rate / (1 + rate).
| Rate | Add VAT | Remove VAT | VAT inside a price |
|---|---|---|---|
| Standard: 20% | Net x 1.2 = gross | Gross / 1.2 = net | VAT in a gross price = gross / 6 |
| Reduced: 5% | Net x 1.05 = gross | Gross / 1.05 = net | VAT in a gross price = gross x 1/21 |
| Zero: 0% | Gross equals net | Net equals gross | VAT is £0.00 |
How to work out VAT at 20 per cent
Illustration: an Amazon seller has a VAT-inclusive selling price of £24.00 for an item assumed to be standard-rated. £24.00 / 1.2 = £20.00 net. £24.00 / 6 = £4.00 VAT. Adding VAT back gives £20.00 x 1.2 = £24.00.
This illustration is price arithmetic, not a client example or a calculation of profit. It excludes platform fees and other costs.
Why taking 20 per cent off is wrong
VAT is calculated on the net price. Taking 20 per cent off a gross price applies the percentage to a larger amount. In the illustration, £24.00 x 0.8 = £19.20, which is not the £20.00 net price. Divide by 1.2 instead.
When do the reduced and zero rates apply?
The standard rate of 20 per cent applies to most goods and services. The reduced rate of 5 per cent applies to some goods and services, such as children's car seats and home energy. The zero rate of 0 per cent applies to zero-rated goods and services, such as most food and children's clothes.
These are examples, not a decision about your sale. Check the official VAT rates and goods and services guidance. Some supplies are exempt from VAT; exemption is a separate category from the zero rate.
Reduced-rate illustration: a gross price of £21.00 contains £1.00 VAT because £21.00 x 1/21 = £1.00. The net price is £20.00.
Using the result
The calculator preserves precision during the calculation and rounds monetary results to the nearest penny for display. It calculates VAT on the price entered, not the VAT payable on a return.
To check registration timing, use the VAT registration threshold tracker. For the application process, read our guide to registering for VAT.
Frequently asked questions
How do I add VAT at 20 per cent?
Multiply the net price, before value added tax (VAT), by 1.2 to get the gross price including VAT. Illustration: £20.00 x 1.2 = £24.00, including £4.00 VAT.
How do I remove VAT from a gross price?
Divide the gross price by one plus the VAT rate expressed as a decimal. At 20 per cent, divide by 1.2. At 5 per cent, divide by 1.05. The result is the net price before VAT.
How do I calculate the VAT inside a price?
At 20 per cent, divide the gross price by 6. At 5 per cent, multiply the gross price by 1/21. At the zero rate, there is no VAT amount to extract.
Why can I not just subtract 20 per cent?
VAT is calculated on the net price, not the gross price. Subtracting 20 per cent of the gross price removes too much. Illustration: £24.00 gross divided by 1.2 gives £20.00 net. Subtracting 20 per cent instead gives £19.20.
Which VAT rate should I choose?
The standard rate is 20 per cent for most goods and services. The reduced rate is 5 per cent for some goods and services, such as children's car seats and home energy. The zero rate is 0 per cent for zero-rated goods and services, such as most food and children's clothes. Check the official guidance for your supply. This calculator does not decide the rate.
Is zero-rated the same as exempt from VAT?
No. Zero-rated goods and services have a VAT rate of 0 per cent. Exempt supplies are a separate category. The zero-rate option performs price arithmetic and does not classify a supply as zero-rated or exempt.