UK VAT Calculator

Rates and rules change. Check the official source. Authority: HM Revenue & Customs (HMRC)

UK Value Added Tax (VAT) Rates and Rules

Value Added Tax (VAT) is a consumption tax charged on most goods and services provided by registered businesses in the United Kingdom. Registered businesses charge VAT on sales (output tax) and reclaim the VAT they pay on business purchases (input tax).

The Three UK VAT Rate Tiers

Standard Rate (20%)

Applies to the majority of commercial goods and services, including electronics, adult clothing, professional fees, and restaurant dine-in meals.

Reduced Rate (5%)

Applies to select essentials including domestic domestic fuel and power, children's car seats, and mobility aids.

Zero Rate (0%)

Applies to most staple food and groceries, children's clothing, physical and digital books, and public passenger transport.

UK VAT Formulas (Adding vs. Removing VAT)

1. Adding 20% Standard VAT

Gross Amount = Net Price × 1.20

VAT = Net Price × 0.20

2. Removing 20% VAT (Reverse Calculation)

Net Price = Gross Amount ÷ 1.20 (or Gross × 5 ÷ 6)

VAT = Gross Amount - Net Price (or Gross ÷ 6)

Mandatory VAT Registration Threshold

Under UK tax legislation, a business must register for VAT with HMRC if its taxable turnover exceeded £90,000 over the previous 12-month rolling period or is projected to exceed this threshold within the next 30 days. Businesses below this threshold may register voluntarily to reclaim input tax on capital investments.

Frequently Asked Questions

What are the current UK VAT rates?

As per HM Revenue & Customs (HMRC), the standard rate is 20%, the reduced rate is 5% (e.g. domestic fuel, children car seats), and the zero rate is 0% (most food, books, children clothing).

How do I add 20% VAT to a net amount?

Multiply the net amount by 1.20 (or multiply by 0.20 to calculate the VAT amount alone).

How do I remove 20% VAT from a gross amount?

Divide the gross amount by 1.20 to find the net price, or multiply by (20 / 120, which is 1/6) to find the VAT portion.

Is VAT registration mandatory in the UK?

Businesses must register for VAT if their VAT taxable turnover exceeds the statutory registration threshold over a 12-month rolling period. Always verify current thresholds on gov.uk.