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VAT Calculator

Updated · By the CalculatorDash editorial team · How we check our maths

Quick answer

To add VAT, multiply the net price by (1 + rate): £100 plus 20% UK VAT is £120. To remove VAT from a VAT-inclusive price, divide by (1 + rate): £120 ÷ 1.2 = £100, so the VAT is £20. Don't simply take 20% off a gross price; that gives the wrong answer.

VAT

£
%

VAT amount

£20.00

Net (excluding VAT)
£100.00
Gross (including VAT)
£120.00
Rate used
20%

Rates change and some goods use reduced rates. Check the tax authority's current rate list for specific items.

How this calculator works

Value added tax is charged at each step of the supply chain, with businesses reclaiming the VAT they pay on their own purchases. Shoppers in the UK, EU and Australia see prices that already include it; businesses usually invoice net prices with VAT added on top.

The most common mistake is removing VAT by subtracting the rate from a gross price. Because VAT is added to the net price, you must divide the gross price by (1 + rate). Taking 20% off £120 gives £96, but the correct net price is £100.

The formula

Add VAT
VAT = net × rate; gross = net × (1 + rate)
Remove VAT
net = gross ÷ (1 + rate); VAT = gross − net
VAT share of a gross price
rate ÷ (1 + rate), e.g. 1/6 at 20%

Worked example

A UK supplier invoices £250 net. VAT at 20% is £50, so the invoice total is £300. A German receipt for €59.50 includes 19% VAT: the net price is €59.50 ÷ 1.19 = €50.00 and the VAT is €9.50.

Tips

  1. 01At 20%, the VAT inside a gross price is exactly one sixth of it.
  2. 02Keep VAT invoices for everything you buy for the business so you can reclaim the input VAT.
  3. 03Selling digital services across borders often means charging the customer's local VAT rate.

Frequently asked questions

How do I calculate VAT?

Multiply the net price by the VAT rate. At 20%, VAT on £80 is £16 and the gross price is £96.

How do I remove VAT from a price?

Divide the VAT-inclusive price by 1 plus the rate. At 20%, divide by 1.2: £96 ÷ 1.2 = £80.

What is the UK VAT rate?

The standard rate is 20%. A reduced 5% rate applies to some goods such as domestic energy, and some items are zero-rated.

Is GST the same as VAT?

They work the same way. Australia, New Zealand, Canada and India call their value added tax GST.