Add or remove VAT at 20%, 5% or a custom rate — net, VAT and gross shown instantly.
Calculate VAT
VAT Rate
%
£
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
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.