Welcome to my online VAT calculator, a simple no frills easy to use calculator to work out the VAT on any amount whether it be adding or reversing/subtracting/backwards calculations. I've also added the capability to select the VAT rate as the UK government has tweaked it between 15%, 17.5% and 20% during the last decade. For more information on VAT in the UK and its history please see below
What is VAT? VAT stands for Value Added Tax and is charged upon purchase of most goods and services in the United Kingdom. The current VAT rate in 2022 for the UK currently stands at 20% and has been since the 4th January 2011. There have been just 3 changes to the VAT rate since 1991. UK Gov website source A global recession prompted a temporary reduction to 15% on the 1st December 2008 which lasted until the 1st January 2010, the VAT rate was then returned to the ever familiar 17.5% however on the 4th January 2011 the rate was raised to 20% following a coalition government emergency budget and has remained there ever since.
How to add VAT To calculate the current (20%) rate of VAT on any number that excludes VAT, simply multiply it by 1.2 and the result will then be inc VATFormula: X*1.2=Inc VAT
How to subtract/reverse VAT To subtract/reverse the current (20%) rate of VAT from any number that includes VAT, divide it by 1.2. The resulting number will now exclude VATFormula: X/1.2=Excl VAT. This is also known as a backwards VAT calculation.
How to find the VAT To calculate how much VAT was paid from any number that already includes VAT, multiply it by 0.2, the resulting number will now show just the VATFormula: X*0.2=VAT Amount
Brief History of 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% 2011-2022: 20%
*New* added IPT (Insurance Premium Tax) to the calculator Added a 12% / 20% setting to allow calculation of standard & higher rate insurance premium tax (IPT). What is IPT?
Random VAT Facts 1. VAT is the government's third largest source of revenue after income tax and national insurance.2. Donations to charity, MOT testing and National Insurance contributions are all outside the scope of VAT.3. 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.4. 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%.5. A VAT registered business is allowed to reclaim from HMRC any VAT it pays on goods and services it buys in purchases, this is known as input tax. 6. The interpretation of tax law on food has lead to some very high profile court cases including the famous 'pastygate' affair and also the Jaffa Cakes brand taking matters to a tribunal to argue that they should be classified as a 'chocolate covered cake' (0% VAT) as opposed to a 'chocolate covered buscuit' (20% VAT)7. When a UK business's taxable turnover exceeds £85,000 in a 12 month period it is require to become VAT registered. source8. VAT is a requirement of EU membership. From December 2015 no country is permitted to charge a VAT rate below 15%.