🧾 UK VAT Calculator

Value Added Tax (VAT) is a consumption tax charged on most goods and services sold in the United Kingdom. It is the third largest source of government revenue after income tax and National Insurance. The tax was introduced in the UK in 1973 as a condition of joining the European Economic Community, replacing the earlier Purchase Tax. Today, VAT is administered by HM Revenue and Customs (HMRC) and applies at the point of sale, meaning the tax is built into the price consumers pay. Businesses registered for VAT collect the tax on behalf of HMRC and can reclaim VAT they have paid on their own purchases.

The UK has three VAT rates. The standard rate of 20% applies to most goods and services, including electronics, cars, restaurant meals, alcohol, clothing, and professional fees. This rate has been in place since 4 January 2011, when it was raised from 17.5%. The reduced rate of 5% applies to a limited range of goods and services, including domestic fuel and power (gas and electricity), energy-saving materials, children's car seats, smoking cessation products, and some renovation and conversion work on residential property. The zero rate of 0% applies to most food for human consumption, children's clothing and footwear, books and newspapers (including e-publications since 2020), prescription medicines, and public transport.

VAT registration is mandatory for any business whose taxable turnover exceeds the registration threshold of £90,000 per year (as of 2024/25, frozen until at least April 2026). Businesses can register voluntarily if their turnover is below this threshold. Once registered, a business must charge VAT on its sales, file regular VAT returns (usually quarterly), and pay the difference between VAT collected and VAT reclaimed to HMRC. Some goods and services are exempt from VAT entirely (such as insurance, finance, and education), meaning no VAT is charged and the business cannot reclaim related input VAT — this is different from zero-rating.

This simple calculator lets you quickly add VAT to a net amount or remove VAT from a gross amount, using any of the three UK VAT rates. It is useful for pricing products, checking invoices, verifying receipts, and understanding how much of a purchase price goes to the government. All calculations are performed in your browser — no data is sent to any server.

The calculator performs two simple operations. To add VAT, it multiplies the net amount by (1 + rate/100). For example, £100 net at 20% VAT gives £120 gross, with £20 VAT. To remove VAT, it divides the gross amount by (1 + rate/100). For example, £120 gross at 20% VAT gives £100 net, with £20 VAT. The VAT amount is always the difference between the gross and net amounts.

UK VAT Rates

The VAT registration threshold is £90,000. Businesses with turnover above this must register, charge VAT and file returns with HMRC.

1. Enter the amount you want to calculate VAT on.
2. Choose whether to add VAT (from a net amount) or remove VAT (from a gross amount).
3. Select the VAT rate — 20% standard, 5% reduced, or 0% zero rate.
4. Click the Calculate button.
5. Review the net amount, VAT amount and gross amount.

What is the standard UK VAT rate?

The standard UK VAT rate is 20%. It applies to most goods and services and has been in place since 4 January 2011.

What is the VAT registration threshold?

The VAT registration threshold is \u00A390,000 per year. Businesses whose taxable turnover exceeds this amount must register for VAT, charge it on sales and file VAT returns with HMRC. Registration can also be done voluntarily for businesses below the threshold.

What is the difference between zero-rated and exempt?

Zero-rated goods (0% VAT) include most food, children's clothing and books. The business can still reclaim VAT paid on its purchases. Exempt goods (no VAT charged) include insurance, finance and education. Exempt businesses cannot reclaim input VAT on purchases related to exempt supplies.

How do I remove VAT from a gross price?

To remove 20% VAT from a gross price, divide the gross amount by 1.20. For example, \u00A3120 / 1.20 = \u00A3100 net, with \u00A320 VAT. For 5% VAT, divide by 1.05. This calculator does it automatically.

When did the UK VAT rate change to 20%?

The standard rate was increased from 17.5% to 20% on 4 January 2011 under the coalition government. Before that, it had been temporarily reduced to 15% from December 2008 to January 2010 as a stimulus measure during the financial crisis.

This tool is for informational purposes only and does not constitute financial advice. Consult a qualified financial professional for advice specific to your situation.

When pricing products for your business, remember that the VAT you charge is not your money — you are collecting it on behalf of HMRC. Keep accurate records of all VAT charged (output VAT) and paid (input VAT), as the difference is what you owe or reclaim each quarter. If your business has a mix of standard-rated and zero-rated sales, you may need to apportion input VAT on shared purchases.

For consumers, understanding VAT helps you compare prices effectively. A product priced at £120 including 20% VAT is actually £100 net plus £20 tax. If the same product is zero-rated (like most food), the full £120 is the seller's revenue. The distinction between zero-rated and exempt is important for businesses: zero-rated businesses can reclaim input VAT, while exempt businesses cannot.