UK VAT Calculator

20% standard, 5% reduced and zero-rated.

Calculate UK VAT at the standard, reduced or zero rate, adding it to a net price or extracting it from a gross one.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Amount

VAT band

Direction

Rates change with budgets and local ballot measures, and the rate that applies depends on the delivery address and product category. Treat these as planning figures, not as a filing.

Price including VAT

£120.00

£20.00 of VAT at 20%

Net£100.00

VAT at 20%£20.00

Gross£120.00

Registration threshold£90,000

Registration is compulsory once taxable turnover exceeds the threshold on any rolling 12-month basis, not the tax year. Zero-rated categories including most food, books and children's clothing carry 0% but still count toward turnover.

How the UK VAT Calculator works

UK VAT is 20% standard, 5% on a short list including domestic fuel and children's car seats, and 0% on a longer list including most food, books and children's clothing. Zero-rated is not the same as exempt, and the difference decides whether you can reclaim input VAT.

Also known as: VAT calculator UK · 20 percent VAT calculator · HMRC VAT calculator

The calculation itself

UK VAT is 20% standard, 5% reduced and 0% zero-rated. Gross = net × 1.2 at the standard rate; net = gross ÷ 1.2; and the VAT within a gross figure is gross ÷ 6.

The zero rate is unusually wide in the UK by international standards: most food, books and newspapers, children's clothing and footwear, and public transport all carry it, which makes correct rate determination more consequential here than in systems with fewer categories.

Running the numbers

A £58 gross price at the standard rate: £48.33 net, £9.67 VAT.

The same £58 for a zero-rated item, a children's coat, say; is £58 net and no VAT. The business retains £9.67 more per sale on an identical price, which is why the rate applying to your specific goods is worth establishing precisely rather than assuming.

And the reduced rate at 5%: £55.24 net, £2.76 VAT. Three rates, three quite different outcomes from the same shelf price.

What gets missed

The zero-rate boundaries are famously fine-grained. Children's clothing is zero-rated by size rather than by intended wearer, and the long-running disputes over whether particular snack foods are cakes or biscuits are genuine litigation rather than folklore.

Exempt is not zero-rated. Insurance, finance, education and health are exempt, which means no VAT is charged and no input VAT can be recovered, a materially worse position for the supplier than zero-rating.

What to do next

Establish the rate for each product line against HMRC's published guidance and record the reasoning. Where the boundary is genuinely arguable, a written non-statutory clearance is available and worth having.

Then make sure the accounting complies with Making Tax Digital. Returns must be filed from compatible software with digital links throughout, and manual re-keying between systems breaks the requirement even where the numbers are right.

The flat rate scheme and whether it helps

The flat rate scheme lets small businesses pay a fixed percentage of gross turnover instead of accounting for input and output VAT separately. The percentage varies by trade sector and is lower than 20% because it notionally accounts for input recovery.

It wins for businesses with low input VAT, consultants, service providers with few taxable purchases. It loses for anyone buying substantial stock or equipment, because the real input VAT exceeds what the flat rate assumes.

The limited cost trader rules narrowed it considerably: businesses spending little on goods pay a higher rate that removes most of the benefit. The calculation is worth running rather than assuming either way, compare a year of actual input and output VAT against the flat rate percentage on the same turnover, and the answer is usually unambiguous in one direction.

It is a rate rather than an absence of VAT, which means zero-rated sales still count toward the registration threshold and still allow full input recovery. A business selling entirely zero-rated goods can be required to register and will receive repayments rather than making payments.

That is an unusually favourable position and one worth checking for rather than assuming. Businesses selling children's clothing, most food or books frequently register voluntarily for exactly this reason.

The monthly return option exists for repayment businesses and is worth taking, since it moves the cash back three times faster than quarterly filing.

Where to go next

The UK VAT question rarely arrives on its own. These are the ones that usually come with it:

VAT Calculator — Add VAT or extract it, at any rate.
VAT Registration Threshold Calculator — When you must register, and what it costs you.
Reverse VAT Calculator — The VAT inside a gross price, done correctly.
Etsy Fee Calculator — Every Etsy fee on one sale, itemised.

Sources

Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.

Frequently asked questions

What is the UK VAT rate?

20% standard. A 5% reduced rate applies to domestic fuel and power, energy-saving materials and a few other categories. Zero rate applies to most food, books, newspapers, children's clothing and public transport.

What is the difference between zero-rated and exempt?

Zero-rated sales are taxable at 0%. They count toward your registration threshold and you can reclaim input VAT on the costs of making them. Exempt sales are outside VAT entirely, do not count toward the threshold, and block the related input VAT recovery.

How do I remove 20% VAT from a price?

Divide by 1.2, or equivalently take one sixth off. A £120 gross price is £100 net plus £20 VAT. Taking 20% off £120 gives £96, which is wrong.

What is the Flat Rate Scheme?

A simplification for smaller businesses: you charge normal VAT but pay HMRC a flat percentage of gross turnover instead of accounting for input VAT line by line. It suits businesses with few VATable costs and works badly for those with many.