VAT Calculator (UK)
Add VAT to a net price or take VAT off a gross price, at the 20% standard rate or the 5% reduced rate.
Add VAT to a net price or take VAT off a gross price, at the 20% standard rate or the 5% reduced rate.
Every formula used by these calculators. They match the FNSACC323 Perform financial calculations unit.
Markup calculates profit as a percentage of the cost price. Profit Margin calculates profit as a percentage of the selling price.
Fixed Costs stay the same no matter how much you sell (e.g. rent, insurance). Variable Cost is what it costs to make or deliver one single unit (materials, packaging, per-item shipping) — it goes up and down with sales, unlike fixed costs. Selling Price is what you charge per unit.
The UK standard rate of VAT is 20%. A reduced rate of 5% applies to some goods and services, such as home energy, and some things are zero-rated.
Example. An invoice is £500 plus VAT. The gross total is £500 × 1.2 = £600 and the VAT is £100.
A £600 receipt including VAT contains £600 ÷ 6 = £100 of VAT.
Taking 20% off a gross price does not remove the VAT. 20% of £600 is £120, not £100. At the standard rate, VAT is one sixth of the gross price.
Multiply by 1.05 to add VAT and divide by 1.05 to remove it. The VAT in a gross price is the gross price divided by 21.
You must register for VAT when your taxable turnover goes over £90,000 in any rolling 12-month period.
Tax rates and thresholds change. Check the current rules with GOV.UK before relying on a figure.
Divide the VAT-inclusive price by 1.2 at the standard rate. £120 ÷ 1.2 = £100.
One sixth. Divide a VAT-inclusive price by 6 to get the VAT amount.
The standard rate is 20%, the reduced rate is 5%, and some goods and services are zero-rated or exempt.