Finance Calculator · UK
Add or remove UK VAT instantly — 20%, 5% and 0% rates
To add VAT to a net price, multiply by 1.20 for the standard rate (or 1.05 for the reduced rate). To remove VAT from a gross price, divide by 1.20 — not subtract 20%, which is a common mistake. Dividing £120 by 1.20 gives the correct net of £100; subtracting 20% of £120 gives £96, which is wrong.
Businesses must register for VAT once their taxable turnover exceeds £90,000 in any 12-month period (2024/25 threshold). Once registered, you charge VAT on your sales (output tax) and can reclaim VAT on your business purchases (input tax). The difference is paid to or reclaimed from HMRC quarterly via a VAT return.
For business financial planning, use our Break-Even Calculator to factor VAT into your pricing strategy, or our Freelance Rate Calculator to set VAT-inclusive rates.