UK VAT add and remove calculator, 2026/27

How this is calculated

To add VAT to a net amount, the calculator multiplies the net figure by the VAT rate to find the VAT element, then adds the two together to reach the gross, VAT-inclusive figure, exactly as you would on a standard sales invoice.

To remove VAT from a gross amount, the calculator divides the gross figure by one plus the VAT rate (for example 1.20 at the standard rate) to find the underlying net amount, then the VAT element is the difference between the gross and net figures.

A common mistake is to simply take 20% off a gross figure to find the net amount; this understates the net figure because the 20% should be calculated on the net, not the gross, amount, which is why dividing by 1.20 (or 1.05 at the reduced rate) is the correct approach.

When each VAT rate applies

The standard rate of 20% applies to most goods and services in the UK. The reduced rate of 5% applies to specific supplies such as domestic gas and electricity, children's car seats and some energy-saving materials. The zero rate applies to items including most food, books, newspapers, children's clothing and new residential construction, and some supplies are exempt from VAT entirely (such as insurance and certain financial services), which is different from being zero-rated.

Zero-rated and exempt sound similar but differ for VAT recovery purposes: zero-rated supplies still count towards your taxable turnover and allow input VAT recovery, whereas exempt supplies do not and can trigger partial exemption restrictions.

Practical uses for contractors and small companies

This tool is useful for quickly checking a supplier invoice, working out how much VAT to charge on a quote, or reconciling a receipt where only a gross figure is shown, without needing to open bookkeeping software.

If you are not yet VAT registered, you should not add VAT to your invoices at all; check the VAT registration threshold calculator if you are unsure whether you need to register.

How do I remove VAT from a total correctly?

Divide the VAT-inclusive (gross) figure by 1.20 for the standard 20% rate, or 1.05 for the reduced 5% rate, to find the net amount. Simply subtracting 20% from the gross figure gives an incorrect, understated net amount.

What is the difference between zero-rated and VAT-exempt?

Zero-rated supplies are taxable at 0%, count towards your VAT-registration turnover, and allow you to reclaim related input VAT. Exempt supplies are outside VAT altogether, do not count towards the registration threshold, and generally block related input VAT recovery.

Which items are charged at the reduced 5% VAT rate?

Common examples include domestic gas and electricity, certain energy-saving materials installed in homes, children's car seats and some mobility aids for older people. The list is specific, so check HMRC guidance for your particular product or service.

Do I charge VAT if I am not VAT registered?

No. You must not charge or show VAT on your invoices unless you are VAT registered, even voluntarily below the threshold. Charging VAT without being registered is not permitted and can lead to HMRC penalties.