What are the current UK VAT rates?

As of 2025, the main UK VAT rates are: Standard rate 20% (applies to most goods and services), Reduced rate 5% (for some items such as domestic fuel and power, children’s car seats), and Zero rate 0% (for items like most food, children’s clothes, books and newspapers). Some supplies are exempt from VAT altogether, such as certain financial services, education and health services.

How do I add 20% VAT to a price?

To add 20% VAT to a net price, multiply the net price by 1.20. For example, if the net price is £100, VAT is £100 × 20% = £20 and the gross price is £100 × 1.20 = £120. In the calculator, choose Add VAT, enter 100 as the amount, select 20% and it will show VAT of £20 and gross of £120.

How do I remove VAT from a price?

To remove VAT from a VAT-inclusive price, divide the gross price by 1 + VAT rate. For the 20% rate, divide by 1.20. For example, if the gross price is £120, the net price is £120 ÷ 1.20 = £100 and VAT is £20. In the calculator, choose Remove VAT, enter 120 as the amount and select 20% to see the breakdown.

What is the difference between zero-rated and VAT-exempt?

Zero-rated supplies are taxable at 0%, so you charge 0% VAT on sales but you can usually reclaim VAT on related purchases. Exempt supplies are outside the scope of VAT, so you do not charge VAT and you normally cannot reclaim VAT on related costs. This distinction matters for VAT registration and input VAT recovery.

UK VAT Calculator – Add, Remove & Understand VAT Rates (2025)

Q: When do I need to register for UK VAT?

You must normally register for UK VAT if your taxable turnover exceeds the VAT registration threshold in a 12‑month period, or you expect it to exceed the threshold in the next 30 days alone. There are also rules for non‑UK businesses selling into the UK. Always check the latest threshold and guidance on GOV.UK or speak to a professional adviser.

How this UK VAT calculator works

This tool lets you work in both directions:

Add VAT – start from a net price (excluding VAT) and calculate VAT and the VAT-inclusive price.
Remove VAT – start from a VAT-inclusive price and work back to the net price and VAT amount.

Formulas for adding and removing VAT

1. Adding VAT to a net price

Let:

Net = price excluding VAT
r = VAT rate as a percentage (e.g. 20 for 20%)

VAT amount = Net × (r / 100)

Gross price = Net × (1 + r / 100)

Example (20% VAT)

Net = £100, r = 20
VAT = £100 × 20 / 100 = £20
Gross = £100 × 1.20 = £120

2. Removing VAT from a gross price

Let:

Gross = price including VAT
r = VAT rate as a percentage

Net price = Gross ÷ (1 + r / 100)

VAT amount = Gross − Net

Example (20% VAT)

Gross = £120, r = 20
Net = £120 ÷ 1.20 = £100
VAT = £120 − £100 = £20

Current UK VAT rates (overview)

The UK has several VAT rates. The main ones are:

Standard rate – 20%: applies to most goods and services.
Reduced rate – 5%: applies to some items such as domestic fuel and power, children’s car seats and certain energy‑saving materials (subject to conditions).
Zero rate – 0%: applies to items like most food, children’s clothes, books and newspapers, public transport and some health products.
Exempt: no VAT is charged and input VAT is usually not recoverable (e.g. many financial services, education, some health and welfare services, certain property transactions).

The exact list of which goods and services fall into each category is detailed in HMRC guidance and can change over time, so always check the latest rules on GOV.UK or with a professional adviser.

Worked examples

Example 1 – Adding 20% VAT to a service fee

A consultant charges a net fee of £750. You need to show the VAT and total invoice amount.

Net = £750
VAT rate = 20%
VAT = £750 × 20% = £150
Gross = £750 + £150 = £900

In the calculator: choose Add VAT, enter 750, select 20%. The tool will show VAT of £150 and gross of £900.

Example 2 – Removing 20% VAT from a shop price

A product is advertised at £36 including VAT. You want to know the net price and VAT amount.

Gross = £36
VAT rate = 20%
Net = £36 ÷ 1.20 = £30
VAT = £36 − £30 = £6

In the calculator: choose Remove VAT, enter 36, select 20%. The tool will show net £30 and VAT £6.

Example 3 – Using the 5% reduced rate

A domestic energy bill shows a net charge of £200 at 5% VAT.

Net = £200
VAT rate = 5%
VAT = £200 × 5% = £10
Gross = £210

In the calculator: select 5% and enter 200 as the net amount.

Common UK VAT questions

Do I always charge 20% VAT?

No. While 20% is the standard rate, some supplies are reduced‑rate, zero‑rated or exempt. The correct rate depends on:

what you are selling (type of goods or services)
who you are selling to (consumer vs business, UK vs overseas)
where the supply is treated as taking place (place‑of‑supply rules)

What is the difference between zero‑rated and exempt?

Zero‑rated (0%): taxable supplies at 0%. You charge 0% VAT but can usually reclaim VAT on related purchases.
Exempt: not taxable for VAT. You do not charge VAT and generally cannot reclaim VAT on related costs.

When should I register for VAT?

You normally must register if your taxable turnover exceeds the VAT registration threshold in a rolling 12‑month period, or you expect it to exceed the threshold in the next 30 days alone. There are also rules for non‑UK businesses and for distance selling. Thresholds and rules can change, so check the latest information on GOV.UK or speak to a qualified accountant.

Disclaimer

This calculator is for general information and illustration only. It does not replace professional tax advice and does not cover all special VAT schemes (such as flat rate, margin schemes, or MOSS). Always confirm critical calculations with HMRC guidance or a professional adviser.

UK VAT Calculator (Add or Remove VAT)