VAT Tax Calculator UK 2026/27 — Add, Remove & Reverse
VAT is applied to most UK goods and services. The standard rate is 20%, reduced rate 5% (domestic energy, children's car seats), and 0% for zero-rated goods (most food, children's clothing, books). This calculator handles adding VAT to a net price, removing VAT from a gross price, and reverse VAT to find the tax element within a VAT-inclusive amount.
You must register for VAT when taxable turnover exceeds £90,000 in a rolling 12-month period.
VAT Calculator: Add, Remove and Reverse VAT Instantly
Value Added Tax (VAT) is charged on most goods and services in the UK at a standard rate of 20%. Whether you are a business owner pricing products, a consumer checking if you have paid the right amount, or a bookkeeper reconciling accounts, this VAT calculator handles all common scenarios instantly.
UK VAT rates explained
The standard rate of 20% applies to most goods and services. The reduced rate of 5% applies to specific items including domestic fuel and power and children's car seats. A zero rate of 0% applies to most food, children's clothing, books, newspapers, public transport and women's sanitary products. Some items are exempt from VAT entirely, including insurance, financial services, education, and healthcare.
Businesses must register for VAT if their taxable turnover exceeds £90,000 in a rolling 12-month period. Once registered, you must charge VAT on your sales, submit quarterly VAT returns, and pay the difference between VAT collected and VAT paid on business purchases.
How to use this calculator
Select your VAT rate (20%, 5%, or 0%), enter your amount, and choose the operation. "Add VAT" shows the gross price including VAT. "Remove VAT" extracts the VAT from a gross price to show the net amount. "Reverse VAT" is useful when you know the total including VAT and need to work out the original amount and VAT portion separately.
UK VAT Rates for 2026/27
| Rate | Percentage | Applies To |
|---|---|---|
| Standard | 20% | Most goods and services (electronics, consultancy, construction, software) |
| Reduced | 5% | Domestic fuel and power, children's car seats |
| Zero | 0% | Most food, children's clothing, books, newspapers, public transport |
| Exempt | — | Insurance, postal services, health care, education, betting |
Exempt vs Zero-Rated: Zero-rated items still count as "taxable" for VAT registration purposes (they add to your turnover). Exempt items do not count toward the £90,000 threshold and you cannot reclaim VAT on costs related to them.
How to Calculate VAT: Three Methods
1. Add VAT (Net → Gross)
You have a net price and want to know the total including VAT. Multiply the net amount by (1 + VAT rate).
Example: £250 net × 1.20 = £300 gross (£50 VAT)
2. Remove VAT (Gross → Net)
You have a gross price and want to extract the VAT amount and the net price. Divide the gross amount by (1 + VAT rate).
Example: £300 gross ÷ 1.20 = £250 net (£50 VAT)
3. Reverse VAT (Work Backwards)
The same as "remove VAT" — useful when you only know the total paid and need to find the original price and tax component. This is essential for checking supplier invoices or reclaiming VAT on expenses.
At 20%: multiply the gross by 0.1667 (or 1/6) to get the VAT amount directly. Then subtract to get net.
When Do You Need to Register for VAT?
UK VAT registration is mandatory once your taxable turnover exceeds £90,000 in any rolling 12-month period. This threshold has been £90,000 since 1 April 2024 (it was £85,000 from 2017 to 2024) and remains at £90,000 for 2026/27.
Taxable turnover means the total value of everything you sell that is not VAT-exempt. It includes:
- Standard-rated sales (20%)
- Reduced-rated sales (5%)
- Zero-rated sales (0%)
It does not include exempt sales (insurance, postage, health services).
Voluntary registration: Even if your turnover is below £90,000, you can register voluntarily. This is often smart if you have significant VAT-able business expenses (e.g., buying stock, equipment, paying for software) because you can reclaim the VAT you pay to suppliers.
💡 Pro Tip
If you are a limited company with £60,000 turnover and £15,000 of VAT-able expenses (software, office equipment, professional services), voluntary registration lets you reclaim £2,500 in VAT. The admin cost of filing quarterly VAT returns is usually worth it.
Frequently Asked Questions
What is the VAT fraction for 20%?
The VAT fraction is 1/6 (or 0.1667). If you have a gross amount including 20% VAT, multiply by 1/6 to get the VAT amount. For example, £120 gross × 1/6 = £20 VAT. This works because £20 is 1/6 of £120, and £100 is 5/6 of £120.
Do I charge VAT on postage?
If you charge postage and your business is VAT registered, postage is normally treated as part of the sale and takes the same VAT rate as the goods, so it is usually 20%. Royal Mail universal postal services are exempt when you buy them, but courier services and handling fees are standard-rated (20%).
What is flat rate VAT?
The Flat Rate Scheme lets small businesses pay a fixed percentage of their turnover as VAT, rather than calculating VAT on every transaction. You still charge 20% to customers, but you only pay HMRC a lower rate (for example, 14.5% for accountancy or 10.5% for computer repair; businesses that spend very little on goods pay 16.5%, and you get a 1% discount in your first year of VAT registration). You cannot reclaim VAT on purchases under this scheme. It is only worth it if your expenses are low.
How do I calculate VAT for a discount?
VAT is calculated on the discounted net price, not the original price. If an item is £100 with a 10% discount, the net is £90. VAT at 20% is £18, making the gross £108. If you offer a discount after VAT is added, the VAT amount must be adjusted proportionally.
Is VAT charged on labour?
Yes, labour charges by VAT-registered tradespeople are standard-rated (20%) unless the work qualifies for reduced or zero rating. For example, installing certain energy-saving materials may qualify for a reduced or zero rate depending on where the work is done. New build construction is zero-rated. Always check HMRC Notice 708 for construction VAT rules.
Sources & Methodology
- HMRC: VAT Rates
- HMRC: VAT Guide (Notice 700)
- HMRC: VAT on Different Goods and Services
- HMRC: VAT Registration Thresholds
All calculations are verified against official HMRC thresholds and rates for the 2026/27 tax year. Figures are updated within 24 hours of any HMRC announcement. Calculations are for guidance only — consult a qualified accountant for personalised advice.