The short answer
To add VAT at the standard rate, multiply the price by 1.2 (or by 1.05 at the reduced rate). To take VAT out of a price that includes it, divide by 1.2 (or 1.05). The VAT in a price that includes 20% VAT is one sixth of it; at 5%, it's one twenty-first.
Work it out
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| Before VAT | |
| VAT | |
| Including VAT |
UK VAT rates
| Rate | % | Add VAT | VAT inside a VAT-inclusive price |
|---|---|---|---|
| Standard | 20% | × 1.2 | ÷ 6 |
| Reduced | 5% | × 1.05 | ÷ 21 |
| Zero | 0% | × 1 | none |
Which rate applies depends on what you sell, and some things are exempt rather than zero-rated. HMRC's rates of VAT on different goods and services is the official list. You only charge VAT if you're VAT-registered.
VAT calculator FAQs
How do I work out VAT backwards from a total?
Divide the total by 1.2 to get the price before VAT, and the difference is the VAT. For £120 including VAT: £120 ÷ 1.2 = £100, so the VAT is £20.
What's the VAT fraction?
It's the share of a VAT-inclusive price that is VAT: 1/6 at 20%, and 1/21 at 5%.
Do I round VAT up or down?
This calculator rounds to the nearest penny. HMRC has its own rounding rules for VAT invoices, so check with your accountant if it matters for your business.
Does AgreeVia work out VAT on invoices?
Yes. Set a VAT rate on each item (20%, 5%, 0% or exempt) and AgreeVia works out the VAT for each rate and the totals to the penny. You stay responsible for the VAT treatment of what you issue.
Good to know
This calculator does the arithmetic only. It doesn't know whether VAT applies to what you sell or which scheme you use. Ask your accountant or HMRC if you're unsure.
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Make a quote or invoice with the VAT worked out for each item, and have your client sign to accept or confirm it.
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