To add UK VAT at 20%, multiply the price by 1.2. To remove it, divide the VAT-inclusive price by 1.2. For example, £120 ÷ 1.2 = £100 before VAT, so £20 of the price is tax. The calculator above does both in one step and also handles 5% and custom rates.
Most people go wrong by taking 20% off the total. This guide shows why that fails, with worked examples you can check yourself.
UK VAT rates at a glance
These are the rates listed on GOV.UK:
| Rate | Applies to | Multiplier to add VAT |
|---|---|---|
| Standard, 20% | Most goods and services | × 1.2 |
| Reduced, 5% | Some goods and services, such as home energy and children's car seats | × 1.05 |
| Zero, 0% | Items such as most food and children's clothes | No VAT added |
Some supplies, such as postage stamps and financial or property transactions, are exempt from VAT altogether. Zero-rated and exempt are not the same thing: a zero-rated item is still part of the VAT system, but the rate charged is 0%.
How to add VAT to a price
Take the price before VAT (the net price) and multiply it by 1 plus the rate. At 20% that is 1.2.
- £500 × 1.2 = £600. VAT is £100.
- £250 × 1.2 = £300. VAT is £50.
- At the 5% rate: £200 × 1.05 = £210. VAT is £10.
How to remove VAT from a price
Divide the VAT-inclusive (gross) price by 1 plus the rate. At 20% that means dividing by 1.2.
- £600 ÷ 1.2 = £500. VAT is £100.
- £84 ÷ 1.2 = £70. VAT is £14.
- At 5%: £105 ÷ 1.05 = £100. VAT is £5.
Why taking 20% off is wrong
VAT is charged as 20% of the net price. That makes it one sixth of the gross price, not one fifth. Take 20% off £120 and you get £96, but the real net price is £100.
A quick mental shortcut
At 20%, the VAT in a gross price is the price divided by 6. So £120 ÷ 6 = £20 and £60 ÷ 6 = £10. At 5%, divide by 21 instead.
VAT reference table at 20%
| Price including VAT | Price before VAT | VAT |
|---|---|---|
| £12.00 | £10.00 | £2.00 |
| £19.99 | £16.66 | £3.33 |
| £35.00 | £29.17 | £5.83 |
| £120.00 | £100.00 | £20.00 |
| £250.00 | £208.33 | £41.67 |
| £1,000.00 | £833.33 | £166.67 |
Figures are rounded to the nearest penny, so a shop's till may differ by a penny on some prices.
VAT when you shop online
Prices shown to UK consumers normally already include VAT, so you never need to add it. Trade suppliers and some business-to-business sites quote "ex VAT" prices, and the VAT is added at checkout. Always check which one you are looking at before comparing prices.
Discounts work the same either way. A percentage off the VAT-inclusive price cuts the VAT in proportion. A £150 item including VAT with 20% off costs £120, which is a £100 net price plus £20 VAT. To work out the saving itself, use the Discount Calculator. If you have a sale price and a code, the Stacked Discount Calculator shows the combined result.
Buying for a business
If you are VAT-registered, you can usually reclaim VAT on business purchases, so the ex-VAT price is the real cost to you. If you are not registered, the VAT-inclusive price is what you pay. Businesses must register once taxable turnover goes over £90,000 in the last 12 months, or is expected to within the next 30 days, according to GOV.UK.
This calculator is a guide for everyday use. For invoices, VAT returns or tax decisions, check HMRC guidance or ask an accountant.
How to use the calculator
- Choose whether to add or remove VAT.
- Enter the amount and the rate (20% by default).
- Read the net price, the VAT and the gross price.
Comparing deals once you know the true price? Try the Voucher Comparison Calculator, or browse offers across PrimeVoucher's stores.