VAT calculator (UK): add or remove VAT

By Software for Tradespeople Editorial Team · Updated 12 October 2026 · Facts checked 12 Oct 2026 · 5 min read

Quick answer

To add UK VAT at the standard 20% rate, multiply the net price by 1.2. To remove it, divide the gross price by 1.2 (not multiply by 0.8). For example, £450 plus VAT is £540, and £540 including VAT is £450 net plus £90 VAT. Use 1.05 for the 5% reduced rate.

On this page

How do I use the VAT calculator?
What is the formula for adding and removing VAT?
Worked VAT examples for tradespeople
What are the most common VAT mistakes?
Put the numbers on a proper invoice
FAQs

Add or remove UK VAT at 20%, 5% or 0% in one step. Enter an amount, pick the rate and choose whether the figure you have includes VAT or not. Rates checked on GOV.UK on 12 October 2026.

How do I use the VAT calculator?

Enter the amount. Type the figure you have, for example a supplier's price or the total on a customer's invoice.
Pick the rate. 20% is the standard rate and covers most trade work. 5% is the reduced rate. 0% is for zero-rated supplies.
Choose the mode. "Add VAT" if your amount is net (before VAT). "Remove VAT" if your amount already includes VAT.
Read the results. You get the net amount, the VAT and the gross (total) amount, ready to copy onto a quote or invoice.

Only charge VAT if you are VAT registered. If you are not registered, your prices simply have no VAT on them, and you should not show a VAT line on your invoice.

What is the formula for adding and removing VAT?

VAT formulas for UK rates (rates per GOV.UK, checked 12 Oct 2026)
Task	20% standard rate	5% reduced rate
Work out the VAT on a net price	Net × 0.2	Net × 0.05
Add VAT to a net price	Net × 1.2	Net × 1.05
Remove VAT from a gross price	Gross ÷ 1.2	Gross ÷ 1.05
VAT inside a gross price	Gross ÷ 6 (the "VAT fraction")	Gross ÷ 21

Why divide by 1.2 and not take off 20%? Because the 20% was worked out on the net price, not the gross. If the gross is £120, the net was £100 and the VAT was £20. Taking 20% off £120 gives £96, which is wrong. Dividing £120 by 1.2 gives the correct £100.

The "divide by 6" shortcut works for 20% VAT because the VAT is one sixth of the VAT-inclusive total (20 out of 120). For 5% VAT, the VAT is one twenty-first of the total (5 out of 105).

Quick reference: common trade amounts at 20%

Net, VAT and gross at the 20% standard rate
Net (before VAT)	VAT at 20%	Gross (including VAT)
£100	£20	£120
£250	£50	£300
£500	£100	£600
£1,000	£200	£1,200
£2,500	£500	£3,000
£5,000	£1,000	£6,000

Round VAT to the nearest penny on each invoice. If an invoice has several lines, working out VAT on the invoice total rather than line by line avoids rounding differences of a penny or two.

Worked VAT examples for tradespeople

1. Adding VAT to a labour quote

A plasterer quotes a homeowner £1,850 for labour and is VAT registered.

VAT: £1,850 × 0.2 = £370
Total to pay: £1,850 + £370 = £2,220

2. Removing VAT from a supplier receipt

An electrician pays £540 at the merchant, VAT included, and wants the net cost for job costing.

Net: £540 ÷ 1.2 = £450
VAT (reclaimable if registered): £540 minus £450 = £90

3. Zero-rated energy-saving installation

HMRC's energy-saving materials notice zero-rates (0%) the installation of qualifying energy-saving materials, such as insulation, solar panels and heat pumps, in homes from 1 May 2023 to 31 March 2027. From 1 April 2027 the rate goes back to 5%.

A £6,000 qualifying installation today: VAT £0, total £6,000.
The same job from 1 April 2027 at 5%: VAT £300, total £6,300.

If you quote now for work finishing after March 2027, say clearly which VAT rate applies and when.

4. Domestic reverse charge invoice

A VAT-registered bricklayer invoices a VAT-registered main contractor £4,000 for work reported under CIS. Under the domestic reverse charge (in force for tax points from 1 March 2021):

Invoice shows: net £4,000, VAT at 20% of £800 shown for information only.
Amount the contractor pays the bricklayer: £4,000 (before any CIS deduction).
Invoice note, using HMRC wording: "Reverse charge: Customer to pay the VAT to HMRC".

The full rules, including the end-user exclusion, are in our domestic reverse charge VAT guide.

What are the most common VAT mistakes?

Multiplying by 0.8 to remove VAT. On £540 this gives £432 instead of £450, understating your costs by £18.
Charging VAT before you are registered. You can only charge VAT once you are VAT registered. The compulsory threshold is £90,000 of taxable turnover in the last 12 months. See our VAT registration guide for tradespeople.
Quoting without saying whether VAT is included. Homeowners compare totals. Always write "£X plus VAT" or "£X including VAT".
Using the wrong figure on the Flat Rate Scheme. If you use the Flat Rate Scheme you still charge customers VAT as normal, but you pay HMRC a fixed rate and keep the difference. This calculator shows what to charge, not what you owe. See our Flat Rate VAT Scheme guide.
Adding VAT on a reverse charge invoice. If the reverse charge applies, the customer accounts for the VAT, so do not add it to the amount due.

VAT rates are the same across England, Scotland, Wales and Northern Ireland. Rates can change at a Budget, so check GOV.UK VAT rates if you are reading this after a Budget announcement.

Put the numbers on a proper invoice

Once you have the figures, a VAT invoice must show your VAT number, the net amount, the VAT rate and the VAT charged. Our free UK invoice templates include a VAT version and a reverse charge version with the totals worked out for you. If you invoice every week, quote and invoice software does these sums automatically and sends the invoice from your phone.

Frequently asked questions

How do I work out 20% VAT?

Multiply the net amount by 0.2 to get the VAT, or by 1.2 to get the total including VAT. For example, £1,850 of labour has £370 VAT, so the customer pays £2,220. The standard rate has been 20% since 4 January 2011 and applies to most goods and services in the UK.

How do I remove VAT from a price?

Divide the VAT-inclusive price by 1.2 for 20% VAT, or by 1.05 for 5% VAT. The answer is the net price, and the difference is the VAT. For example, £540 divided by 1.2 is £450, so the VAT is £90. Multiplying by 0.8 is a common mistake that gives £432, which is wrong.

What is the VAT rate on building work?

Most building and repair work is standard rated at 20%. Installing qualifying energy-saving materials, such as insulation, solar panels and heat pumps, in homes is zero rated (0%) from 1 May 2023 to 31 March 2027, then reverts to 5% from 1 April 2027, according to HMRC's energy-saving materials notice. Check the notice for exactly which jobs qualify.

When do I have to register for VAT?

You must register if your taxable turnover for the last 12 months goes over £90,000. You have 30 days from the end of the month you went over to register. You can also register voluntarily below the threshold, which can make sense if most of your customers are VAT-registered businesses.

Do I charge VAT under the domestic reverse charge?

Not on the invoice total. If you are a VAT-registered subcontractor supplying construction services to a VAT-registered contractor under CIS, the domestic reverse charge usually applies from 1 March 2021. You show the VAT amount and a note such as 'Customer to pay the VAT to HMRC', but you do not add it to what the customer pays you. End users who confirm in writing are excluded.

Is VAT the same in Scotland, Wales and Northern Ireland?

Yes. VAT is a UK-wide tax and the 20%, 5% and 0% rates apply in England, Scotland, Wales and Northern Ireland, and the £90,000 registration threshold is the same everywhere. The zero rate for energy-saving installations also applies in both Great Britain and Northern Ireland until 31 March 2027.

Sources and checks

Prices, features and ratings were checked on 12 October 2026 against these sources. Software prices change often, so confirm on the vendor's site before you buy.