VAT, or Value Added Tax (VAT), is a consumption tax charged on most goods and services in the UK. The standard VAT rate is 20%, and this applies to the majority of everyday items and services that businesses provide.
However, not everything is taxed at the same rate. The UK VAT system includes four main categories:
Standard Rate (20%): Applies to most goods and services in the UK, covering the majority of business transactions.
Reduced Rate (5%): Applies to specific essentials such as domestic energy, children’s car seats, and some health-related products. This ensures lower VAT on household necessities.
Zero Rate (0%): VAT is charged at 0%, meaning no additional tax for the customer, but businesses still record it. This includes goods like food, books, newspapers, and children’s clothing.
VAT Exempt: Some goods and services are entirely outside the VAT system, so VAT does not apply at all. Businesses cannot reclaim VAT on expenses related to these. Examples include education, insurance, and certain financial services.
Whether you’re invoicing in the UK or trading internationally, this calculator helps you stay compliant and avoid mistakes.
VAT might seem confusing, but the maths is straightforward:
| Net Amount | +20% VAT | +5% VAT |
|---|---|---|
| £1,000 | £1,200 | £1,050 |
| £500 | £600 | £525 |
| £200 | £240 | £210 |
| Gross Amount | Net at 20% | Net at 5% |
|---|---|---|
| £1,000 | £833.33 | £952.38 |
| £500 | £416.67 | £476.19 |
| £200 | £166.67 | £190.48 |
Working out VAT manually can be confusing, especially when you’re trying to add VAT to a net price or remove VAT from a gross price. Our VAT calculator is designed to take away that complexity and give you instant, reliable results.
It’s particularly useful if you’re a small business issuing VAT invoices, as it ensures you charge your clients the correct amount. Contractors and freelancers can also benefit by checking VAT-inclusive pricing before sending quotes or invoices. For buyers, it’s a quick way to confirm how much VAT you’ve been charged and whether it matches HMRC rules.
By using this tool, you save time, avoid mistakes, and gain confidence in your financial paperwork. Instead of second-guessing, you’ll know exactly how much VAT applies to your transaction.
This VAT Calculator is intended as a general guide and should not be relied upon as financial advice. VAT obligations depend on HMRC regulations, applicable rates, and the nature of your goods or services.
Businesses should always confirm VAT calculations with HMRC guidance or a qualified accountant to ensure compliance.
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