This calculator helps you work out VAT amounts using current UK rates. Value Added Tax (VAT) is charged on most goods and services sold by VAT-registered businesses in the UK. Understanding how VAT is calculated is essential for businesses approaching the registration threshold and for consumers wanting to know the pre-VAT price of purchases.
VAT is calculated as a percentage of the net price. To add VAT, multiply by 1.2 (for standard rate). To find the VAT-exclusive price from a VAT-inclusive amount, divide by 1.2. This tool handles both calculations automatically.
The UK VAT rates are: standard rate 20% (most goods and services), reduced rate 5% (home energy, children's car seats, sanitary products), and zero rate 0% (most food, children's clothing, books, newspapers). The VAT registration threshold is £90,000 (from April 2024). Businesses with taxable turnover below this can register voluntarily. VAT returns are typically submitted quarterly via Making Tax Digital (MTD).
A product priced at £500 excluding VAT: VAT at 20% = £100, giving a VAT-inclusive price of £600. Conversely, if an item costs £600 including VAT, the net price is £500 (£600 / 1.2) and the VAT element is £100. For reduced-rate items at 5%, a £1,200 energy bill includes £57.14 VAT (£1,200 / 1.05 x 0.05).
Source: Based on official HMRC 2025/26 VAT rates. Last updated March 2026.
Data verified against official UK government sources. Last checked April 2026.