VAT calculator
Work out VAT in both directions: add it to a net price, or take it out of a gross price.
Including VAT
1,200.00
- Excluding VAT1,000.00
- VAT200.00
- Including VAT1,200.00
UK rates are 20% standard, 5% reduced on things such as domestic fuel, and 0% on most food, books and children’s clothing. Domestic electricity in Great Britain is 0% from 1 October 2026 to 31 March 2027.
How it works
VAT is charged on the price before tax. At 20% a price of 1,000 becomes 1,200 including VAT.
The other direction is less obvious. The VAT in a price of 1,200 is not 20% of 1,200 but 200, which is about 16.7% of the gross price. You divide by 1.2 rather than multiplying.
The United Kingdom has a standard rate of 20%, a reduced rate of 5% on things such as domestic fuel and children’s car seats, and a zero rate on most food, books and children’s clothing. Domestic electricity in Great Britain is zero-rated from 1 October 2026 to 31 March 2027; other domestic fuel stays at 5%.
Zero rated is not the same as exempt. A zero rated business still reclaims the VAT it pays on its own purchases; an exempt one cannot.
VAT registered businesses pay over the VAT they charge and deduct the VAT they pay, so the tax is a cost only to the final customer.
How the tool calculates
The tool works out only the VAT and rounds it to the nearest penny, halves upwards. The other figure is the sum or the difference, so the net amount and the VAT always add up exactly to the gross. From a net amount, the VAT is the amount times the rate divided by 100. From a gross amount, it is the VAT fraction of the amount, which HMRC’s VAT guide (Notice 700, section 7.3.1) gives as the rate divided by 100 plus the rate: one sixth at 20% and one twenty-first at 5%. HMRC’s own example is £2.40 at 20%, which includes 40p of VAT, and the tool gives the same. An amount with more than two decimals is first rounded to whole pence, and the rate can be any number from 0 to 100, decimals included.
Rounding on an invoice
Section 17.5 of the same guide lets businesses that issue VAT invoices round the total VAT on an invoice down to a whole penny, ignoring any fraction. VAT worked out line by line may be rounded down to the nearest 0.1p, or to the nearest 1p or 0.5p, as long as the same method is used every time. Retailers who work out VAT line by line or per invoice must not round down, but may round each calculation up or down (section 17.6), which is what the tool does.
That can leave a penny’s difference from the tool. On a net price of £83.33 at 20% the VAT is £16.666: the tool shows £16.67 and a gross price of £100.00, while an invoice rounded down under section 17.5 shows £16.66 and £99.99.
Eating in or taking away
HMRC’s notice on catering and takeaway food (Notice 709/1) sets out which rate applies to food. Food and drink consumed on the premises is standard-rated, and so are hot takeaway drinks and hot takeaway food that meets the notice’s tests. Cold takeaway food is zero-rated, unless it is of a type that is always standard-rated, such as crisps, sweets or bottled water. A cold sandwich at £4.50 eaten in the café therefore includes £0.75 of VAT at 20%, while the same sandwich taken away carries none.