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. VAT is the government's third largest source of revenue after income tax and national insurance.

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. 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.

4. VAT exemption fails include Lucozade, who failed in their quest to be classified as a 'functional food', Innocent trying to pull off their smoothies as a 'liquified fruit salad' and Pringles who insisted that their crisps were not actually made of potato...

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. Hungary residents suffer the worlds highest VAT rates with 27%. Croatia, Denmark, Norway and Sweden all closely follow with a 25% tax on sales. Our United States cousins enjoy much lower sales taxes, between 0-11.75%.

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

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