VAT Calculator

This online VAT calculator shows you how to add or subtract VAT from any number. Simply enter your price into the box on the form to calculate the net or gross amounts.

1: Enter Price

2: Select VAT Rate

20% Standard 17.5% Standard 15% Standard 5% Reduced

CALCULATE

Results

Less VAT:

Net Price:

Add VAT:

Gross Price:

Current and Historical Rates

The current system was introduced just after the UK's entry into the European Economic Community (EEC) on 1st January 1973. It replaced the previous Purchase and Selective Employment Tax.

The Chancellor announces any rate changes during The Budget or Autumn Statements.

The Current Standard Rate is 20%

Historical VAT Rates

Rates across Europe vary with Germany at 19%, France at 20%, Ireland at 23% and Italy 22%. The lowest tax rate is in Liechtenstein and Switzerland at just 7.7%. Other countries including the 52 states in the USA may have different sales tax charges.

Exceptions from the Standard Rate

Most exceptions incur a lower rate of tax as follows:

• Zero-rated items such as children's clothes and some food.
• Exempt such as bank interest paid and received.
• Reduced rate of 5% for some energy saving products such as solar panels installed in your home.
• Electricity or gas for domestic premises is 5% where businesses pay 20%.
• Insurance Premium Tax (IPT) is not the same as VAT and you can't claim back this type of tax in your monthly returns.

Businesses not registered for VAT should not charge it for sales invoices. When checking your self employed tax liabilities, you have to register if your turnover for the previous 12 months or 30 day period is over a certain threshold.

VAT Threshold

The VAT threshold is when a business must register for VAT. If their taxable turnover exceeds the threshold in a rolling 12-month period, they must register for VAT. The threshold from 1st April 2024 is £90,000.

• From 1st April 2024 - Registration threshold £90,000 - Deregistration under £88,000
• To 31st March 2024 - Registration threshold £85,000 - Deregistration under £83,000

Source: HMRC).

Most businesses complete a VAT return each quarter. If output tax exceeds input tax, then the difference is paid to HM Revenue and Customs (HMRC). If the reverse is true, then HMRC provide a refund. You can either pay through your HMRC VAT account or online at the Tax Service website.

How to Calculate Results at the Current Rate of 20%

Deducting VAT

If you have a gross amount and want to determine the net value, then simply divide the gross value by 1.20 to provide the net value. For example, an invoice that includes VAT totalling £150 would have a VAT amount of £25 with the net value at £125. This result is calculated by dividing £150 by 1.2 which gives the net value of £125 with the difference being the tax at 20%.

Adding VAT

If you have a figure you want to add VAT against, multiply by 0.20% to find the VAT value or 1.20 to find the gross value including VAT. For example, an invoice of £125 multiplied by 20% provides a VAT figure of £25.

The net amount is the value you use in your accounts for purchases and sales if you're a VAT registered company.

This page was last reviewed on 10th January 2022 and has the latest rates from HMRC. Data source for VAT rates in Europe is the OECD consumption tax website.