How to use
- Choose Add VAT if your price is before VAT (net), or Remove VAT if it already includes VAT (gross).
- Enter the amount in pounds and pence.
- Pick the rate: 20% standard, 5% reduced or 0%.
You get the price with or without VAT, the VAT amount, and buttons to copy either figure. The VAT is rounded to the nearest penny.
How it is calculated
Adding VAT
- VAT = net price × rate
- Price including VAT = net price + VAT = net price × 1.2 (at 20%)
Removing VAT
- VAT = gross price × rate ÷ (100 + rate), the VAT fraction
- At 20%: VAT = gross ÷ 6; net price = gross ÷ 1.2
- At 5%: VAT = gross ÷ 21; net price = gross ÷ 1.05
Examples
| Price excluding VAT | VAT at 20% | Price including VAT |
|---|---|---|
| £10.00 | £2.00 | £12.00 |
| £49.99 | £10.00 | £59.99 |
| £100.00 | £20.00 | £120.00 |
| £1,000.00 | £200.00 | £1,200.00 |
| Price including VAT | VAT at 20% (÷ 6) | Price excluding VAT |
|---|---|---|
| £12.00 | £2.00 | £10.00 |
| £60.00 | £10.00 | £50.00 |
| £120.00 | £20.00 | £100.00 |
| £1,500.00 | £250.00 | £1,250.00 |
At the 5% reduced rate, an £84.00 energy bill includes £4.00 of VAT (£84 ÷ 21), so £80.00 before VAT.
A common mistake
Taking 20% off a VAT-inclusive price does not remove the VAT. On £120, that gives £96, not £100. The VAT was added on top of the net price, so you need to divide by 1.2, or take one-sixth off, to reverse it.