VAT Calculator

What is VAT?

Value Added Tax (VAT) is a consumption tax added to the purchase price of most goods and services in the UK.

The standard UK VAT rate in 2026 is 20%. This rate has been in place since 4 January 2011, following a temporary reduction to 15% during the 2008 financial crisis and a brief return to 17.5% in 2010. UK Gov website source

How to Calculate VAT (at 20%)

Adding VAT to a Net Amount:
To calculate the total price including VAT, multiply your net amount by 1.2.
Formula: Net Price × 1.2 = Gross Price (Inc. VAT)

Removing VAT from a Gross Amount:
To work backwards and find the original price before VAT was added, divide your VAT-inclusive amount by 1.2.
Formula: Gross Price ÷ 1.2 = Net Price (Excl. VAT)

Finding the VAT Amount on a Gross Price:
If you have a total price that already includes 20% VAT and just want to know how much tax was paid, divide the total by 6 (do not multiply by 0.2, as this calculates 20% of the gross total rather than 20% of the original net price).
Formula: Gross Price ÷ 6 = VAT Amount

Historical UK VAT Rates

1977 - 1979: 8% (plus higher rate of 12.5%)
1979 - 1991: 15%
1991 - 2008: 17.5%
2008 - 2010: 15%
2010 - 2011: 17.5%
2011 - 2026: 20%

Insurance Premium Tax (IPT)

This calculator also includes a toggle for calculating standard (12%) and higher rate (20%) Insurance Premium Tax. IPT is a specific tax levied on general insurance premiums in the UK. More about IPT

Random VAT Facts
1. Frenchman Maurice Lauré was the first to introduce VAT on the 10th April 1954 however the idea was not his, German Dr. Wilhelm von Siemens dreamed up the concept in 1918. It avoids drawing comparison with a sales tax by only taxing the value added at each stage of production.

2. When a UK business's taxable turnover exceeds £85,000 in a 12 month period it is require to become VAT registered. source

3. Donations to charity, MOT testing and National Insurance contributions are all outside the scope of VAT.

4. VAT is a requirement of EU membership. From December 2015 no country is permitted to charge a VAT rate below 15%.

5. VAT was introduced as a European replacement for the old purchase tax. This was charged at differing rates according to the luxury of an item.

6. There are currently three rates of value added tax: standard (20%), reduced (5%) and zero (0%). Examples of VAT exempt items include: gambling, insurance and postage stamps.

7. Personal consumers of products and services cannot claim back VAT on purchases made, however businesses are able to recover VAT on products and services that they buy in order to produce further goods or services that will then be sold providing they are VAT registered.

8. VAT (Value Added Tax) was first introduced in France in 1954 and made its first appearance in the UK on 1st April 1973.