VAT Calculator (UK)
Calculate UK VAT with 5% or 20% rates. Enter a net (exclusive) or gross (inclusive) price to get the VAT amount, total price, and a doughnut chart breakdown.
About This Calculator
The UK VAT Calculator helps businesses and individuals quickly compute VAT amounts for both inclusive and exclusive pricing scenarios. Whether you are a small business owner calculating output VAT on sales or a consumer checking the VAT component of a purchase, this tool handles the math instantly.
Simply enter the amount, select the VAT rate (5% reduced or 20% standard), and choose whether the amount is VAT exclusive (VAT will be added) or VAT inclusive (VAT will be extracted from the total). The calculator shows the breakdown of the net amount, VAT amount, and gross total with a chart.
How VAT Works in the UK:
- Businesses with turnover over £90,000 must register for VAT
- Businesses charge VAT on sales (output tax) at the applicable rate
- Businesses reclaim VAT on purchases (input tax)
- The net VAT payable to HMRC = Output tax - Input tax
- End consumers ultimately bear the VAT cost
UK VAT Rates:
- 20% (Standard): Applies to most goods and services
- 5% (Reduced): Domestic fuel, children's car seats, home energy-saving materials
- 0% (Zero): Food, children's clothing, books, public transport
Frequently Asked Questions
What is VAT?
Value Added Tax (VAT) is a consumption tax applied to goods and services at each stage of the supply chain where value is added. It is ultimately borne by the end consumer. In the UK, the standard VAT rate is 20% and the reduced rate is 5%.
What is the difference between VAT exclusive and inclusive?
VAT exclusive means the price shown does not include VAT - VAT is added on top. VAT inclusive means the price shown already includes VAT. For example, if a product costs £100 (exclusive) at 20% VAT, the total is £120. If it costs £100 (inclusive), the actual product price is £83.33 and VAT is £16.67.
What are common VAT rates globally?
In the UK, there are three main VAT rates: Standard rate (20%) applies to most goods and services, Reduced rate (5%) applies to domestic fuel, children's car seats, and home renovations, and Zero rate (0%) applies to most food, children's clothing, books, and public transport.
How is VAT calculated?
VAT exclusive: VAT Amount = Price x (Rate/100), Total = Price + VAT. VAT inclusive: Price without VAT = Total / (1 + Rate/100), VAT = Total - Price without VAT. For example, 20% VAT on £100 exclusive: VAT = £20, Total = £120.
Who needs to register for VAT?
Businesses with taxable turnover exceeding £90,000 in a 12-month period must register for VAT in the UK. Voluntary registration is also possible for businesses below the threshold. Once registered, businesses must charge VAT on their sales and can reclaim VAT on business purchases.
What is input tax credit in VAT?
Input Tax Credit (ITC) allows businesses to deduct the VAT they paid on purchases from the VAT they collect on sales. This ensures that VAT is only applied on the value added at each stage, eliminating cascading of taxes. For example, a manufacturer can claim credit for VAT paid on raw materials.
What is the difference between VAT and sales tax?
VAT is collected at every stage of the supply chain with input tax credit available, while sales tax is collected only at the final point of sale to the consumer. VAT eliminates tax-on-tax (cascading) effect, making it more efficient. Most countries have moved from sales tax to VAT systems.
Are there VAT exemptions?
Yes, certain goods and services are exempt from VAT, including basic food items, healthcare services, educational services, financial services, insurance, and real estate transactions in many jurisdictions. Exports are typically zero-rated. Exempt businesses cannot claim input tax credit.
How do I calculate VAT in Excel?
In Excel, for VAT exclusive: =A1*(1+B1) where A1 is the price and B1 is the VAT rate (e.g. 0.2 for 20%). For VAT inclusive: =A1/(1+B1) to get the price without VAT. You can also use =A1-A1/(1+B1) to calculate just the VAT amount from an inclusive price.
What is the difference between VAT and GST?
GST (Goods and Services Tax) is a comprehensive, multi-stage, destination-based tax that replaced VAT in many countries. While VAT was applied only on goods, GST covers both goods and services. In the UK, VAT is the applicable system, while countries like Australia, Canada, and Singapore use GST.