How to Calculate VAT: The Ultimate Guide (UK & Global)
TL;DR
Master VAT calculations with this complete guide. Learn the formulas to add or remove VAT, understand UK rates (20%), and use our free online calculator.
Table of Contents
Value Added Tax (VAT) is a part of daily life for businesses and consumers alike. Whether you are pricing a product, checking an invoice, or just trying to figure out how much a service actually costs, knowing how to calculate VAT is an essential skill. If you are looking for a reliable vat calculator uk, you are in the right place.
In the UK, the standard VAT rate is 20%, but the math can get tricky depending on whether you are starting with the Net price (excluding VAT) or the Gross price (including VAT).
In this guide, we will break down the simple formulas you need to add or remove VAT, explain how it works for different countries, and introduce you to our free VAT Calculator that does the heavy lifting for you.
What is VAT?
VAT stands for Value Added Tax. It is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.
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For Consumers You pay VAT on most goods and services you buy. It is usually included in the displayed price.
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For Businesses VAT-registered businesses charge VAT on their sales and reclaim VAT on their purchases.
The Golden Formulas
There are two main calculations you will need to perform: adding VAT to a net price, and removing VAT from a gross price.
1. How to Add VAT (Net to Gross)
Use this when you have a price excluding VAT and want to find the total price the customer pays.
Gross Price = Net Price × (1 + VAT Rate)
Example (UK 20% VAT):
If a service costs £100 + VAT:
£100 × 1.20 = £120
2. How to Remove VAT (Gross to Net)
Use this when you have a total price including VAT and want to find the original price before tax. This is common for reclaiming expenses.
Net Price = Gross Price ÷ (1 + VAT Rate)
Example (UK 20% VAT):
If you paid £120 total:
£120 ÷ 1.20 = £100
VAT Rates in the UK
Not everything is charged at 20%. Here is a quick breakdown of UK VAT rates:
| Rate | % | Examples |
|---|---|---|
| Standard | 20% | Most goods and services, electronics, clothes (adults), alcohol. |
| Reduced | 5% | Home energy, children's car seats, some sanitary products. |
| Zero | 0% | Most food, books, newspapers, children's clothes. |
Why Use a VAT Calculator?
Doing the math in your head is fine for simple numbers, but when you are dealing with odd amounts like £1,234.56 or different international rates, mistakes happen.
Try Our Free Tool
Our VAT Calculator is designed to be the fastest way to check your numbers.
- Global Support: Presets for UK, Europe, Canada, Australia, and more.
- Two-Way Calculation: Easily switch between adding and removing VAT.
- Instant Results: See Net, VAT, and Gross amounts simultaneously.
Common Questions
How do I calculate VAT on a calculator?
To add 20% VAT, simply multiply your number by 1.2. To remove it, divide by 1.2.
Is VAT calculated on gross or net?
VAT is always a percentage of the Net amount. The Gross amount is the result of adding that percentage to the Net.
What is the formula for 20% VAT?
VAT Amount = Net Price × 0.20.
Ready to calculate? Head over to the VAT Calculator now and get your numbers right every time.
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