Enter the net (ex-VAT) amount — we'll calculate the VAT and gross price.
Quick examples:
UK VAT Rates 2026
| VAT Rate | Rate | Applies To |
|---|---|---|
| Standard Rate | 20% | Most goods & services, electronics, clothing, professional services, restaurants |
| Reduced Rate | 5% | Domestic energy (gas, electric), children's car seats, sanitary products, mobility aids |
| Zero Rate | 0% | Most food, children's clothing, books, newspapers, public transport, prescription medicines |
| VAT Exempt | Exempt | Financial services, insurance, education, health services, residential property sales |
How to Calculate UK VAT Correctly
✅ Example 1 — Adding VAT at 20% to £500
- Net amount (ex-VAT)£500.00
- VAT at 20% (£500 × 0.20)£100.00
- Gross amount (inc. VAT)£600.00
✅ Example 2 — Removing VAT from £600 gross
- Gross amount (inc. VAT)£600.00
- Divide by 1.20 (NOT subtract 20%)÷ 1.20
- Net amount (ex-VAT)£500.00
- VAT amount£100.00
⚠️ Common mistake: Never subtract 20% to remove VAT. £600 minus 20% = £480 — which is wrong! Always divide by 1.20 to correctly extract VAT from a gross price.
Who Needs to Charge VAT in the UK?
You must register for VAT with HMRC when your taxable turnover exceeds £90,000 in any rolling 12-month period (2026 threshold). Once registered, you must charge VAT on your sales and submit regular VAT returns via Making Tax Digital (MTD) software.
You can register voluntarily below £90,000 — this is often beneficial if your customers are VAT-registered businesses (who can reclaim the VAT) and you have significant VAT on your own expenses to reclaim.
More Free UK Calculators
Frequently Asked Questions
The standard UK VAT rate is 20% for most goods and services. The reduced rate is 5% for items like domestic energy and children's car seats. The zero rate (0%) applies to most food, children's clothing, books and public transport. Some services are VAT-exempt, meaning no VAT is charged and it cannot be reclaimed.
To remove 20% VAT from a gross price, divide by 1.20 — not subtract 20%. For example: £120 ÷ 1.20 = £100 net. If you subtract 20%: £120 - 20% = £96, which is wrong. The calculator above handles this correctly for all VAT rates.
You must register for VAT when your taxable turnover exceeds £90,000 in any rolling 12-month period. You can also register voluntarily below this threshold. Once registered, you must charge VAT, file regular returns via Making Tax Digital software, and can reclaim VAT on business purchases.
Zero-rated means VAT is charged at 0% — you still need to record these sales and can reclaim VAT on related expenses. VAT-exempt means no VAT applies at all, and you cannot reclaim VAT on costs related to exempt sales. Common exempt items include financial services, insurance, and most residential property sales.