VAT Calculator

When this calculator helps

Reach for this calculator whenever you have a net (VAT-exclusive) price and need to know what to actually charge once VAT is added. That covers most day-to-day quoting and invoicing for a UK business: pricing a job for a customer, putting a quote together for a client, working out the gross total on a sales invoice, or sense-checking a supplier's figures before you pay. If you have priced something at, say, £250 plus VAT, this tells you the £300 the customer pays and the £50 of VAT sitting inside it.

It is built around the everyday UK reality of a 20% standard rate, but you can set any rate, so it copes equally with reduced-rate (5%) supplies like domestic energy or zero-rated essentials. Whether you are VAT-registered and passing the tax through to HMRC, or simply trying to understand a bill, the calculator does the arithmetic so you do not have to reach for a percentage in your head.

How to read your result

Adding VAT gives you three numbers, and it helps to know what each one is for. The net amount is the price before tax — what you actually earn on the sale and the figure your margins are based on. The VAT amount is the tax you have added on top; if you are VAT-registered, that money is not yours to keep, it is collected on HMRC's behalf and handed over on your VAT return. The gross amount is the total the customer pays: net plus VAT combined.

On a proper UK invoice you should show all three separately — the net, the rate and VAT in pounds, and the gross — rather than just a single total. That lets a VAT-registered customer reclaim the VAT portion, and it makes your own bookkeeping straightforward when the return is due.

A worked example

Suppose you are a tradesperson quoting £600 for a job, and that work is standard-rated at 20%. The VAT to add is £600 × 0.20 = £120, so the gross price the customer pays is £720. On the invoice you would show £600 net, £120 VAT at 20%, and £720 total. If the same job qualified for the 5% reduced rate instead, the VAT would be just £30 and the gross £630 — which is exactly why entering the correct rate matters before you send anything out.

Common mistakes to avoid

Most VAT errors are not arithmetic slips — they come from applying the wrong rate or mixing up the direction of the calculation.

• Applying 20% to something that is reduced-rated (5%) or zero-rated — food, books and children's clothing are zero-rated, not standard, so adding 20% overcharges the customer.
• Confusing adding VAT with removing it: starting from £120 gross and taking 20% off does not get you back to £100 net (it gives £96). To strip VAT out, divide by 1.20.
• Forgetting that exempt supplies are different from zero-rated — exempt items carry no VAT at all and cannot have input VAT reclaimed against them.
• Assuming you must charge VAT when you are not registered. Below the £90,000 turnover threshold registration is voluntary, and you should not add VAT unless you are registered with HMRC.

UK VAT rates and registration

The UK has a 20% standard rate that applies to the large majority of goods and services, a 5% reduced rate for a defined list (domestic fuel and power, children's car seats, some energy-saving materials), and a 0% zero rate for most food, books, newspapers and children's clothing. A separate category of exempt supplies — such as insurance, postage stamps and some financial services — falls outside the VAT system altogether. Getting the right rate matters because it changes both what you charge and what you can reclaim.

Registration is the other thing to watch. A business must register for VAT with HMRC once its VAT-taxable turnover exceeds £90,000 in any rolling 12-month period, after which it has to charge VAT on its standard-rated and reduced-rated sales and submit returns. Below that, registration is voluntary and can still make sense if you sell mainly to other VAT-registered businesses. This calculator handles the maths whatever your status, but it is not a substitute for HMRC guidance on what rate a particular supply attracts.