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VAT Calculator (United Kingdom)

VAT Calculator (Add Sales Tax)

Reverse VAT Calculator (Subtract Sales Tax)

What is VAT?

The VAT, or Value-Added Tax, is a value-added tax on purchases.

As a value-added tax, only the final consumer pays the VAT – purchases by business at other stages of production do not pay VAT (they are charged VAT, however, those charges act as a credit against the VAT they charge).

Rates

The UK has 3 different VAT rates. The UK government maintains a list of VAT rates by item.

Standard VAT – 20% – This rate covers most goods and services.

Reduced Rate – 5% – This category contains items such as mobility aids, car seats for children, fuel and power, and a variety of household power devices (such as solar power and boilers).

Zero Rate – 0% – This category contains items such as exports to non-EU countries, books & newspapers, and children’s clothing and shoes.

How to calculate VAT (formula)

VAT is calculated by multiplying the VAT rate (20% standard rate in the UK) by the total pre-tax cost. The cost of VAT is then added to the purchase.

Example: £75 of goods x 20% VAT = £15 VAT

£75 of goods + £15 VAT = £90 total

How to calculate reverse VAT (formula)

To find the VAT from a total, divide the total amount by the VAT rate divided by 100 and plus 1.

Example: £70 total (with VAT) at 20% VAT rate

(20% / 100) + 1 = 0.20 + 1 = 1.20

£70 / 1.20 = £58.33 cost before VAT

VAT refunds (tourism & business)

Non-EU travelers are eligible for a VAT refund. For details see the UK government page on tax-free shopping.

Businesses are eligible to reclaim their costs that include VAT. For more information and how to register see the UK government page on reclaiming VAT.

Sources and more resources