What is the UK VAT rate in 2026?

The UK has three positive VAT rates in 2026. The standard rate is 20%, which applies to most goods and services. The reduced rate is 5%, which applies to domestic fuel and power, children's car seats, and certain other goods. The zero rate (0%) applies to most food, children's clothing, books, newspapers and public transport. Some goods and services are VAT-exempt (not the same as zero-rated) — including most financial services, education and healthcare. Businesses are legally required to charge VAT on applicable supplies if their taxable turnover exceeds the registration threshold.

How do I remove VAT from a price?

To remove 20% VAT from a gross (VAT-inclusive) price, divide by 1.2. For example: £120 ÷ 1.2 = £100 net. The VAT element is the gross price minus the net price: £120 − £100 = £20. A useful shortcut for 20% VAT: the VAT element is always exactly one-sixth of the gross price (£120 ÷ 6 = £20). For 5% VAT, divide the gross by 1.05 to find the net, or multiply the gross by 1/21 to find the VAT element.

What is the difference between zero-rated and VAT-exempt?

Both zero-rated and exempt supplies result in no VAT being charged to the customer, but the distinction matters for VAT-registered businesses. Businesses making zero-rated supplies can still register for VAT and reclaim the VAT they paid on their own purchases (input tax). Businesses making only VAT-exempt supplies cannot register for VAT and therefore cannot reclaim input tax — making exemption potentially more costly than zero-rating for businesses with significant VAT-bearing expenses. Examples of zero-rated supplies: food, books, children's clothing. Examples of exempt supplies: insurance, bank charges, private education.

When does a business need to register for VAT?

A business must register for VAT when its taxable turnover exceeds the VAT registration threshold, which is £90,000 in 2026/27 (the threshold has been £85,000 since April 2017, raised to £90,000 from April 2024). The threshold applies to the rolling 12-month period — not the tax year. Businesses can also register voluntarily below the threshold, which allows them to reclaim VAT on purchases. Once registered, the business must charge VAT on applicable supplies, file VAT returns (usually quarterly) and pay any VAT owed to HMRC.

VAT Calculator 2026 — Add or Remove UK VAT Instantly

The source figures. See the VAT rates and registration threshold this calculator uses, each with its official source and the date UKCalc last checked it, on the 2026/27 rates and thresholds UKCalc uses.

Calculate VAT

VAT Rate

Custom VAT Rate

Net Amount (excl. VAT)

Enter the price before VAT is added

Net Amount

—

Excl. VAT

VAT Amount

—

at 20%

Gross Amount

—

Incl. VAT

—

Quick reference for this rate

To add VAT to net price—

To remove VAT from gross price—

VAT as fraction of gross—

UK VAT Rates Explained (2026)

The Three VAT Rates

Rate	What it applies to	Examples
20% Standard	Most goods and services	Electronics, clothing (adult), restaurant meals, professional services, haircuts, alcohol, vehicles
5% Reduced	Specific categories by law	Domestic fuel & power (gas, electricity), children's car seats, mobility aids, smoking cessation products, sanitary products, residential property conversions
0% Zero-rated	Essential goods and services	Most food (not hot food/restaurant), children's clothing & footwear, books & newspapers, prescriptions, public transport (buses, trains, flights), new residential buildings
Exempt	Outside the VAT system	Insurance, banking & finance, private education, healthcare, betting & gaming, postage stamps, burial & cremation

Zero-rated and exempt are not the same — see the FAQ below for the key difference.

How to Calculate VAT Quickly

The fastest mental arithmetic shortcuts:

Rate	Add VAT to net	Remove VAT from gross	Find VAT in gross
20%	Multiply by 1.2	Divide by 1.2	Divide gross by 6
5%	Multiply by 1.05	Divide by 1.05	Divide gross by 21
0%	No change	No change	Zero

Example: A gross invoice is £1,200 including 20% VAT. The VAT element = £1,200 ÷ 6 = £200. Net = £1,200 − £200 = £1,000.

VAT Registration Threshold (2026/27)

Businesses must register for VAT when their taxable turnover exceeds £90,000 in any rolling 12-month period (raised from £85,000 in April 2024). Once registered, the business must:

Charge VAT on all taxable supplies at the appropriate rate
Issue VAT invoices to VAT-registered customers
File VAT returns (usually quarterly) via HMRC's Making Tax Digital system
Pay the difference between VAT collected and VAT paid on purchases

Voluntary registration below the threshold is possible and may be beneficial if the business has significant VAT-bearing expenses — it allows reclaiming input tax. Registration is also required immediately (regardless of turnover) if you expect to exceed the threshold in the next 30 days alone.

VAT on Invoices

A valid VAT invoice must include: your VAT registration number, the supply date, a description of the goods or services, the net amount, the VAT rate applied and the VAT amount. If you supply to other VAT-registered businesses, they can reclaim the VAT you charge them — so quoting prices exclusive of VAT (net) is standard practice in B2B contexts. Consumer-facing businesses typically quote prices inclusive of VAT (gross).

Worked Examples

Alex — Freelance Invoice

Net day rate of £850. VAT-registered, adds standard 20% VAT to client invoice.

Net (excl. VAT) £850.00

VAT at 20% £170.00

Gross (incl. VAT) £1,020.00

Household Energy Bill

Gross energy bill is £189.00 including 5% reduced-rate VAT. How much is the VAT element?

Gross (incl. VAT) £189.00

VAT at 5% (÷21) £9.00

Net (excl. VAT) £180.00

Builder's Materials Invoice

A contractor quotes £2,400 net for labour and materials. Client needs the VAT-inclusive total.

Net (excl. VAT) £2,400.00

VAT at 20% £480.00

Gross (incl. VAT) £2,880.00

Frequently Asked Questions

The UK has three positive VAT rates in 2026. The standard rate of 20% applies to most goods and services. The reduced rate of 5% applies to domestic fuel and power, children's car seats, and certain other specified goods. The zero rate (0%) applies to most food, children's clothing, books, newspapers, prescriptions and public transport fares. Additionally, some supplies are VAT-exempt — including most financial services, private education and healthcare. Businesses must register for VAT once their taxable turnover exceeds £90,000 in any rolling 12-month period (2026/27 threshold).

To remove 20% VAT from a gross (VAT-inclusive) price, divide by 1.2. Example: £120 ÷ 1.2 = £100 net; VAT = £120 − £100 = £20. Quick shortcut: the VAT in any 20% VAT-inclusive price is exactly one-sixth (÷ 6) of the gross. For 5% VAT, divide the gross by 1.05 to find the net, or divide by 21 to find just the VAT element. Example: £189 ÷ 21 = £9 VAT; net = £189 − £9 = £180. This calculator does all of this automatically — just select "Remove VAT" and enter the gross amount.

Both result in no VAT being charged to the customer, but the distinction is significant for VAT-registered businesses. Zero-rated supplies are technically within the VAT system — businesses making zero-rated supplies can register for VAT and reclaim the input VAT they paid on their own purchases and overheads. Exempt supplies are outside the VAT system entirely — businesses making only exempt supplies cannot register for VAT and therefore cannot reclaim input tax, which can make exemption more costly. Examples of zero-rated: food (most), books, children's clothing. Examples of exempt: insurance premiums, bank charges, private school fees, most medical services.

Compulsory registration is required when taxable turnover exceeds the VAT registration threshold of £90,000 in any rolling 12-month period (raised from £85,000 in April 2024). The 12-month period is rolling — not tied to the tax year — so you must monitor your turnover month by month. You must also register immediately if you expect to exceed the threshold within the next 30 days alone. Voluntary registration below the threshold is permitted and often worthwhile if you have significant VAT-bearing expenses (e.g. equipment purchases), as it allows you to reclaim that input tax. Once registered, you must file VAT returns — typically quarterly — and pay any VAT owed to HMRC via Making Tax Digital (MTD) compatible software.

UK VAT Calculator 2026

Calculate VAT

Quick reference for this rate

UK VAT Rates Explained (2026)

The Three VAT Rates

How to Calculate VAT Quickly

VAT Registration Threshold (2026/27)

VAT on Invoices

Worked Examples

Frequently Asked Questions

Related Calculators

Related Guides

Rates, assumptions and sources