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Online VAT Calculator (UK)

Add or remove VAT from any price. Supports 20%, 5%, and 0% UK VAT rates.

2026/27 HMRC rates No signup No data stored Browser-only calculation
£

Gross price (incl. VAT)

£120.00

Net amount (excl. VAT) £100.00
VAT amount (20%) £20.00

Gross price

£120.00

VAT: £20.00

What is Value Added Tax (VAT) in the UK?

Value Added Tax (VAT) is a consumption tax charged on taxable goods and services in the United Kingdom. VAT-registered businesses collect VAT on behalf of HMRC from their customers and reclaim the VAT they pay on business-related expenses.

If your business is VAT-registered, you must charge VAT on your sales (known as output tax) and pay this to HMRC, after deducting any VAT you paid on purchases (known as input tax).

UK VAT Rates Explained

HMRC sets three rates of VAT depending on the goods or services supplied. Standard rate covers the vast majority of commercial products. Reduced and Zero rates are designed for essentials and public utilities:

Category Examples VAT Rate
Food Most unprocessed food for human consumption 0%
Children's clothing Shoes and clothes designed for children 0%
Books and newspapers Physical books, e-books, newspapers, magazines 0%
Energy (domestic) Electricity and gas for residential use 5%
Energy-saving products Solar panels, heat pumps, insulation 0%
Standard goods/services Electronics, professional services, restaurants 20%

When Do You Need to Register for VAT?

You must register for VAT if your taxable turnover exceeds the VAT registration threshold of £90,000 in any rolling 12-month period. Note that this is not a fixed fiscal year or calendar year; it is checked on a rolling monthly basis.

Voluntary VAT registration is also possible if your turnover is below the threshold, which can be beneficial if you spend heavily on VAT-able business inputs and want to reclaim VAT. However, this means you must also charge VAT on your sales, which could make your pricing less competitive to non-VAT-registered customers.

How to Calculate and Remove VAT

Calculating the VAT to add to a price is simple. Multiply the net price by the tax rate. To remove VAT, use the reverse calculations:

  • Add 20% VAT: Multiply by 1.20 (e.g. £100 x 1.20 = £120).
  • Remove 20% VAT: Divide by 1.20 (e.g. £120 / 1.20 = £100).
  • Add 5% VAT: Multiply by 1.05 (e.g. £100 x 1.05 = £105).
  • Remove 5% VAT: Divide by 1.05 (e.g. £105 / 1.05 = £100).

VAT FAQs

What is the UK VAT rate in 2026/27?
The UK has three VAT rates: Standard Rate at 20% (applies to most goods and services), Reduced Rate at 5% (domestic fuel and energy-saving products, children's car seats), and Zero Rate at 0% (food, children's clothing, books, newspapers, and sanitary products).
When must a UK business register for VAT?
You must register for VAT with HMRC when your taxable turnover exceeds £90,000 in any rolling 12-month period. Note that this is a rolling threshold, not a fixed calendar year. You can also register voluntarily if your turnover is below this limit.
What goods and services are zero-rated for VAT?
Zero-rated items include most food (excluding restaurant meals and takeaway items), children's clothing and shoes, books and newspapers (including digital equivalents), prescription medicines, and public transport.
What is the reverse VAT formula?
To remove 20% VAT from a gross price, divide the total by 1.20 (or multiply by 0.8333). For 5% VAT, divide by 1.05. For example: £120 gross price ÷ 1.20 = £100 net price, with the remaining £20 representing the VAT amount.
What is the difference between Zero-Rated and Exempt goods?
Exempt goods (like financial services and postage stamps) do not carry VAT, but a business cannot reclaim VAT spent on overheads related to them. Zero-rated goods carry 0% VAT, and businesses can reclaim the input VAT spent on producing them.
How often do I need to submit VAT returns?
Most VAT-registered businesses submit VAT returns to HMRC quarterly (every three months). This must be done using MTD-compatible software under Making Tax Digital for VAT rules.