VAT Calculator

A VAT calculator works out the value added tax on a price. UK VAT has three rates in everyday use: the standard rate of 20% on most goods and services, a reduced rate of 5% on things like domestic fuel and certain energy-saving installations, and a zero rate on items such as most food and children's clothing. The calculator on this page handles both directions: adding VAT to a price you have quoted net, and removing VAT from a price that already includes it.

• Adding VAT multiplies the net amount by the rate. At 20%, a net figure of 1,000 becomes 1,000 x 1.20, so 1,200 gross with 200 of VAT.
• Removing VAT divides the gross amount by the same multiplier. A gross figure of 1,200 at 20% becomes 1,200 / 1.20, so 1,000 net with 200 of VAT.
• The VAT element is always the difference between the net and gross figures, never a straight percentage of the gross number. Taking 20% off a VAT-inclusive price is a common and costly mistake.

A groundworks contractor quotes a council 8,500 for a car park resurfacing job, excluding VAT, at the standard rate.

• Net price: 8,500.
• VAT at 20%: 8,500 x 0.20 = 1,700.
• Gross price payable: 8,500 + 1,700 = 10,200.

The invoice shows 8,500 net, 1,700 VAT and 10,200 total. If the council had instead asked for a VAT-inclusive price of 10,200, dividing by 1.20 recovers the same 8,500 net.

1. Choose whether you are adding VAT to a net price or removing VAT from a gross price.
2. Pick the rate that applies to what you are selling: 20%, 5% or 0%.
3. Type the amount. The net, VAT and gross figures update as you type, so there is nothing to submit.
4. Copy the figures straight onto your quote, invoice or tender pricing schedule.

The net figure is your income and the figure that matters for your margin. The VAT element is money you collect on behalf of HMRC and pay over on your return, so it never counts as profit. Public sector buyers almost always want prices quoted excluding VAT, because most of them can recover it, and comparing bids on gross prices would distort the evaluation.

Getting VAT wrong on a tender submission can make your price look higher than a competitor's for no good reason, or leave you absorbing tax you forgot to charge. Registered businesses must show the VAT rate and amount on invoices, and buyers checking a pricing schedule will notice inconsistencies. A quick check before you submit avoids both problems.

What is the standard rate of UK VAT?

The standard rate is 20%. A reduced rate of 5% applies to a limited set of supplies such as domestic fuel and power, and some goods and services are zero-rated or exempt.

How do I remove VAT from a total?

Divide the VAT-inclusive total by 1.20 for the standard rate, or by 1.05 for the reduced rate. Subtracting 20% from the gross figure gives the wrong answer.

Should I quote tenders with or without VAT?

Read the pricing instructions in the tender documents. Public buyers usually ask for prices excluding VAT, and will say so in the pricing schedule.

Do I have to register for VAT?

Registration is compulsory once your taxable turnover passes the HMRC threshold, and voluntary below it. Check the current threshold on GOV.UK before deciding.