Add or remove VAT at 20%, 5% or 0%. Calculate VAT-inclusive and VAT-exclusive amounts instantly.
Source: GOV.UK, VAT rates
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
Rates verified: 28 September 2026
Quick Answer
UK VAT standard rate is 20% (reduced 5%, zero 0%). To add VAT: multiply by 1.20. To remove VAT: divide by 1.20. The VAT-inclusive total divided by 6 gives the VAT portion. VAT registration threshold is £90,000.
Disclaimer
This calculator is for guidance only. It is not financial or tax advice: check anything you rely on against the official source or a qualified adviser. Rates and figures come from HMRC and GOV.UK and are reviewed for the 2026/27 tax year. Everything is calculated in your browser; nothing you enter is sent to our servers.
UK VAT rates
| Rate | Applies to |
|---|---|
| 20% Standard | Most goods and services |
| 5% Reduced | Domestic energy, children car seats, mobility aids, sanitary products |
| 0% Zero | Most food, children clothing, books, prescription medicines, public transport |
| Exempt | Insurance, finance, education, healthcare (cannot reclaim input VAT) |
How It Works
Value Added Tax (VAT) in the UK is charged at three rates: Standard (20%), Reduced (5%) and Zero (0%). The standard rate applies to most goods and services. The reduced rate covers items like domestic energy, child car seats, mobility aids and sanitary products. The zero rate applies to essentials including most food, children's clothing, books (ebooks have counted since 2020), prescription medicines and public transport. A fourth category sits outside the rate structure altogether: insurance, finance, education and healthcare are exempt, which means no VAT is charged and none can be reclaimed on the costs behind them.
This calculator supports three modes: Add VAT calculates the gross from a net amount, Remove VAT finds the net from a gross amount, and Reverse VAT extracts the VAT component from a VAT-inclusive total. The arithmetic is short once you see it. Net multiplied by 1.20 gives gross, gross divided by 1.20 gives net, and gross divided by 6 gives the VAT itself, because 20/120 is one sixth. For the 5% reduced rate, multiply or divide by 1.05 instead, and use gross divided by 21 for the VAT portion.
The mistake that catches people out is subtracting 20% from a gross figure. Take £120 including VAT. Knocking 20% off gives £96, but the correct net is £100 and the VAT is £20. VAT is a fifth added to the net, which makes it a sixth of the gross rather than a fifth of it. Working forwards, a £500 net invoice takes £100 of VAT and comes to £600, and £600 divided by 1.20 lands back on £500.
Businesses with VAT-taxable turnover above £90,000 (the 2026/27 threshold) must register for VAT. Below this threshold, voluntary registration is possible, and it often makes sense where your customers are themselves VAT-registered, since the tax you charge is neutral to them while you recover the VAT on your own costs. It works against you if you sell to consumers, where adding 20% to your prices is a straight loss of competitiveness.
Several schemes exist to make VAT less painful for smaller businesses. The Flat Rate Scheme replaces the full input and output calculation with a fixed percentage of gross turnover. Cash Accounting means you only account for VAT on customer payments actually received, which helps cash flow when invoices are paid late. Annual Accounting spreads the year across 9 monthly instalments plus a balancing payment. Whichever route you take, Making Tax Digital is mandatory, so digital records and compatible software such as Xero, QuickBooks or FreeAgent are part of the job.
Most VAT trouble comes from a short list of errors. Missing the registration threshold leads to backdated VAT plus penalties. Charging VAT on exempt items, or reclaiming it on blocked items such as client entertaining, both create corrections later. Applying the 5% rate too widely is common, because the reduced list is narrower than people assume. Late returns attract a £200 penalty plus surcharges, and HMRC investigations remain active, with penalties reaching 100% of the underpaid VAT.
Example: Adding 20% VAT to £500
- Net amount: £500.00
- VAT at 20%: £500.00 × 0.20 = £100.00
- Gross amount: £600.00
- To reverse: £600 ÷ 1.20 = £500 net
Source: GOV.UK, VAT rates
Frequently Asked Questions
- When do I need to register for VAT?
- Registration is compulsory once taxable turnover passes £90,000 in any rolling 12-month period, the 2026/27 threshold, raised from £85,000 in April 2024, and you have 30 days to complete it. A forward test also applies: if you expect £90,000 in the next 30 days alone, register immediately. Voluntary registration is permitted at any level. Once registered you charge VAT on your supplies and submit MTD-compliant quarterly returns, and you can deregister if turnover drops below £88k.
- What is the difference between zero-rated and exempt supplies?
- Neither puts VAT on the customer's invoice, but they behave very differently for the business. Zero-rated supplies are taxable at 0%, so they count towards your turnover and you can still reclaim the input VAT on the costs behind them. Most food, children's clothing, books, prescription medicines and public transport sit here. Exempt supplies such as insurance, finance, education and healthcare fall outside the VAT system, and input VAT on them cannot be reclaimed. Confusing the two is one of the most common VAT errors.
- How do I find the VAT inside a gross price?
- Divide it by 6. VAT at 20% is 20/120 of a gross figure, so one sixth of any VAT-inclusive total is the tax itself: £120 gross contains £20 of VAT and £100 of net. What does not work is subtracting 20% from the gross, which gives £96 and understates the net amount. For the 5% reduced rate the equivalent shortcut is to divide the gross by 21, or divide by 1.05 to get back to the net figure.
- Has the standard UK VAT rate always been 20%?
- No. It has been 20% since January 2011. Before that the standard rate was 17.5% from 1991 to 2010, with a temporary cut to 15% between 2008 and 2010. The reduced rate of 5% and the zero rate have been far more stable over the same period. The 20% figure is what the Add VAT and Remove VAT modes on this page assume unless you pick one of the other rates.