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VAT calculator: add or remove VAT
Add VAT to a price, or take it out of a price that already includes it, at any UK rate. The answer shows how it’s worked out.
Enter a price without VAT to see the VAT and the price with it.
The rule behind it
The UK has three VAT rates. The standard rate, 20%, covers most goods and services. The reduced rate, 5%, covers some, such as children’s car seats and home energy. The zero rate, 0%, covers things such as most food and children’s clothes. Some things are exempt from VAT altogether, such as postage stamps and financial services.
To add VAT, multiply the price by the rate. To take it out of a price that already includes it, the VAT is the price × 20 ÷ 120 at the standard rate, or × 5 ÷ 105 at the reduced rate.
Every receipt and invoice line carries its VAT rate, and the VAT return is prepared from the ledger, so the VAT is worked out once, where the money is recorded.
Questions
How do I take VAT out of a price?
Divide the price including VAT by 1.2 at the standard rate, or by 1.05 at the reduced rate. That gives the price without VAT, and the difference is the VAT: one sixth of the price at 20%, one twenty-first at 5%.
What’s the difference between zero-rated and exempt?
Neither carries VAT. Zero-rated sales are still taxable: they go on your VAT return, and you can reclaim the VAT on what you buy to make them. Exempt sales are outside VAT, and you usually can’t reclaim the VAT on costs that relate to them.
Do I charge VAT if I’m not registered?
No. Only a VAT-registered business charges VAT. You have to register once your VAT taxable turnover goes over the threshold, and you can choose to register below it.
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