VAT calculator

How the VAT calculator works

Enter a figure and the calculator adds VAT to a net amount, or removes VAT from a gross amount, at the standard, reduced or zero rate. It is handy for pricing, invoicing and checking supplier bills.

Businesses must register for VAT once taxable turnover passes the registration threshold, and can register voluntarily below it. Once registered you charge VAT on sales, reclaim it on eligible purchases, and file returns under Making Tax Digital.

Adding to a price and taking it out of one

Adding VAT is straightforward. Taking it out of a VAT-inclusive figure is where people go wrong: it is not the same percentage in reverse. At 20%, VAT is one sixth of the gross figure, not one fifth — dividing by six gets you there, and subtracting 20% does not.

Which rate applies is the harder question

The arithmetic is easy and the classification is not. Food, construction, energy, transport, printed matter and children's items all contain lines where the rate turns on a detail: whether food is hot, whether a building is new or being repaired, whether an item is for a child. Zero-rated is also not the same as exempt — a zero-rated business reclaims its input VAT and an exempt one cannot.

If you are working out a price, get the rate confirmed before quoting. The arithmetic can be corrected; a contract priced on the wrong rate usually cannot.