VAT calculator
Add VAT to a price, or take it out of a price that already includes it, at 20%, 5% or any other rate. Shows the VAT, the price before VAT and the price with it.
- £100.00 plus VAT at 20%
- £120.00
- 20% of £100.00 is £20.00.
- Before VAT
- £100.00
- VAT at 20%
- £20.00
- With VAT
- £120.00
UK VAT is 20% on most goods and services, 5% on some, such as home energy and children’s car seats, and 0% on zero-rated goods such as most food and children’s clothes (GOV.UK, VAT rates). The VAT is rounded to the nearest penny. On an invoice, a VAT-registered business may round its total VAT down to the penny instead (HMRC VAT Notice 700, paragraph 17.5).
Adding VAT
To add VAT at 20%, multiply the price by 1.2. £100 before VAT is £120 with it, and £20 of that is VAT. At the reduced rate of 5%, multiply by 1.05.
Taking VAT out of a price
Taking 20% off a price that includes VAT gives the wrong answer, because the price is already 120% of the amount before VAT. The VAT in it is one-sixth of the price. HMRC calls this the VAT fraction, the rate divided by 100 plus the rate, and its own example is a £2.40 sale at 20%, which has 40p of VAT in it. Dividing by 1.2 gives the price before VAT: £2.
At 5% the VAT fraction is one twenty-first, so £105 including VAT is £100 plus £5 of VAT.
Which rate applies
Most goods and services are 20%. Some, such as home energy and children’s car seats, are 5%, and zero-rated goods such as most food and children’s clothes are 0%. Other things are exempt from VAT altogether, including postage stamps and financial and property transactions. GOV.UK lists the rate for each kind of goods and service.
Rounding
The calculator rounds VAT to the nearest penny. A VAT-registered business may round the total VAT on an invoice down to a whole penny instead, so an invoice can show a penny less (HMRC VAT Notice 700, paragraph 17.5).
Sources
- VAT rates, HMRC
- VAT guide (VAT Notice 700), HMRC