VAT Calculator
Updated: April 2025 for 2025/26 tax year | Data sources: HMRC, ONS, Bank of England
Instantly add or remove VAT from any amount. Works with all UK VAT rates.
Understanding UK VAT
Value Added Tax (VAT) is a tax on the sale of goods and services in the UK. It's added to the price of most products and services. Businesses charge VAT to customers and pay it to HMRC. If you're self-employed or run a business, you must register for VAT once your turnover exceeds £90,000 per year.
UK VAT Rates (2025/26)
Standard Rate (20%): Applied to most goods and services, including food (except basic groceries), clothing, electronics, fuel, and entertainment. Most items fall into this category.
Reduced Rate (5%): Applied to specific items including domestic fuel (gas, electricity), water, certain food items (e.g., bakery bread if not individually wrapped), and children's car seats.
Zero Rate (0%): Applied to some food (bread, milk, eggs), books, newspapers, children's clothing, and exported goods. Zero-rated goods are not exempt from VAT—businesses still claim the VAT back on inputs.
Exempt Items: Some items are exempt from VAT entirely, including postage stamps, insurance, education, and healthcare. Businesses cannot claim VAT back on exempt supplies.
VAT Registration Threshold
If your business turnover exceeds £90,000 in a 12-month period, you must register for VAT with HMRC. Once registered, you charge VAT to customers and submit quarterly VAT returns. You can voluntarily register if your turnover is below the threshold—this may be beneficial if your customers are businesses (they can claim VAT back).
How This Calculator Works
Add VAT: If you have a net price (before VAT) of £1,000, and the VAT rate is 20%, the VAT amount is £200, and the gross price (customer price) is £1,200.
Remove VAT: If you have a gross price of £1,200, and you know it includes 20% VAT, the VAT amount is £200, and the net price is £1,000. (Note: You divide by 1.20, not subtract 20%, because VAT is a percentage of the net amount, not the gross.)
Common VAT Scenarios
- B2B Sales: Businesses charge VAT to other businesses. The purchasing business claims the VAT back on their VAT return.
- B2C Sales: Businesses charge VAT to consumers. Consumers cannot claim VAT back (for personal purchases).
- Exports: Goods exported outside the UK are zero-rated. No VAT is charged, and you can claim back VAT on inputs.
- Online Sales to EU: New rules require VAT on digital services and goods sold to EU customers.
VAT Returns and Deadlines
If registered for VAT, you must file a VAT return every 3 months (quarterly). You calculate VAT owed on sales minus VAT paid on purchases. Payments are usually due 7 days after the quarter ends. Failure to file on time results in penalties and interest.
Financial Disclaimer: This calculator provides estimates only. VAT rules are complex and change frequently. Always consult HMRC guidance or an accountant before registering for VAT or making business decisions based on VAT calculations.
VAT FAQ
What's the difference between net and gross?
Net is the price before VAT. Gross is the price after adding VAT. For example, £1,000 net + 20% VAT = £1,200 gross.
Do I need to register for VAT?
You must register if your turnover exceeds £90,000 in a 12-month period. You can voluntarily register if below the threshold.
Can I claim VAT back?
Registered businesses can claim VAT back on business purchases (input VAT). Consumers cannot. Exempt businesses (e.g., insurance providers) cannot claim VAT back.
What items are zero-rated?
Zero-rated items include basic food (bread, milk, eggs), books, newspapers, children's clothing, and exported goods.
What's the reduced rate for?
The 5% reduced rate applies to domestic fuel (gas, electricity), water, certain food, and specific goods like children's car seats.
How often do I file VAT returns?
VAT returns are filed quarterly (every 3 months). Payments are usually due 7 days after the quarter ends.