VAT Calculator

Add or remove VAT from any amount. Works for UK (20%), EU, and all global VAT rates.

🧾 What is VAT?

VAT - Value Added Tax - is a broad-based consumption tax applied to almost all goods and services sold for use within a jurisdiction. It was first introduced in France in 1954 and has since been adopted by over 170 countries worldwide. The European Union mandates VAT across all member states, while the United Kingdom maintained its own VAT system (set at 20% for most goods) after leaving the EU.

The defining characteristic of VAT is its multi-stage collection mechanism. Every business in the supply chain charges VAT on their sales (output VAT) and can reclaim VAT paid on their purchases (input VAT). This input-output netting means each business only remits the VAT on the value they added - hence "value added" tax. The cumulative effect ensures the full VAT burden falls on the final consumer.

VAT is typically quoted as a percentage of the net (ex-VAT) price. Most countries use a standard rate for most goods, with reduced rates for essential items (food, medicine, children's products) and zero rates for exports. UK rates: standard 20%, reduced 5%, zero 0%. EU standard rates range from 17% (Luxembourg) to 27% (Hungary). Australia and New Zealand use the term GST (Goods and Services Tax) for their equivalent tax at 10% and 15% respectively.

For businesses and consumers alike, understanding how to add VAT to a price and how to reverse-calculate the net price from a VAT-inclusive total is an essential daily skill. This calculator handles both directions instantly for any VAT rate worldwide.

📐 VAT Formula

The mathematics of VAT is straightforward once you understand the two directions:

To Add VAT: Gross = Net × (1 + Rate/100)

To Remove VAT: Net = Gross ÷ (1 + Rate/100)

Net = Price excluding VAT (also called ex-VAT or net price)

Gross = Price including VAT (also called inc-VAT or gross price)

VAT Amount = Gross − Net = Net × Rate/100

Rate = VAT percentage (e.g. 20 for 20%)

To add 20% VAT to £100: Gross = £100 × 1.20 = £120. VAT amount = £20.

To remove 20% VAT from £120 (VAT-inclusive): Net = £120 ÷ 1.20 = £100. VAT amount = £20. Note: you must divide by 1.20, not subtract 20% directly - subtracting 20% from £120 gives £96, which is incorrect.

📖 How to Use This Calculator

Steps to Calculate VAT

Choose your mode: "Add VAT" if you know the net price and want the VAT-inclusive total. "Remove VAT" if you have a VAT-inclusive price and need the net amount.

Enter the amount - in whatever currency you are using. The calculator is currency-agnostic; the symbol shown is just a label.

Select the VAT rate - choose from common preset rates (UK 20%, Germany 19%, Sweden 25%, etc.) or enter a custom rate for your specific country or jurisdiction.

Click Calculate VAT to instantly see the net amount, VAT amount, and gross amount.

💡 Example Calculations

Example 1 - Adding UK VAT to a Service Invoice

A UK freelancer quotes £500 net. Client needs the VAT-inclusive total at 20%.

Mode: Add VAT · Net Amount: £500 · VAT Rate: 20%

Gross = £500 × 1.20 = £600 · VAT Amount = £600 − £500 = £100

Net: £500 · VAT: £100 · Invoice Total: £600

Try this example →

Example 2 - Removing EU VAT from a VAT-Inclusive Receipt

A restaurant bill in Germany totals €47.60 including 19% VAT. Find the net price and VAT amount.

Mode: Remove VAT · Gross Amount: €47.60 · VAT Rate: 19%

Net = €47.60 ÷ 1.19 = €40.00 · VAT = €47.60 − €40.00 = €7.60

Net: €40.00 · VAT: €7.60 · Gross: €47.60

Try this example →

❓ Frequently Asked Questions

What is VAT and how does it work?+

VAT (Value Added Tax) is an indirect consumption tax collected at each stage of the supply chain. Every business charges VAT on its sales (output VAT) and reclaims VAT paid on purchases (input VAT). Only the final consumer bears the full cost. This mechanism makes VAT self-policing - each link in the chain has an incentive to verify the VAT paid by the previous link.

What is the standard VAT rate in the UK?+

The UK standard VAT rate is 20%. A reduced rate of 5% applies to home energy, children's car seats, and some health products. Zero rate applies to most food, children's clothing, books, newspapers, and medicines. Businesses with taxable turnover above £90,000 must register for VAT. VAT is administered by HMRC and collected via quarterly or monthly VAT returns.

How do I calculate the price before VAT from a VAT-inclusive price?+

Divide the VAT-inclusive price by (1 + VAT rate/100). For 20%: Net = Gross ÷ 1.20. For 19%: Net = Gross ÷ 1.19. A common mistake is subtracting the VAT percentage directly - this always gives the wrong answer because the percentage is applied to the net price, not the gross. Use the "Remove VAT" mode in this calculator to avoid any errors.

Which countries use VAT and what are common rates?+

Over 170 countries use VAT or equivalent. Key rates: UK 20%, Germany 19%, France 20%, Italy 22%, Sweden 25%, Hungary 27% (highest in EU), Luxembourg 17% (lowest in EU), Australia GST 10%, New Zealand GST 15%, South Africa 15%, Canada GST 5%, India GST 5-28%. The United States notably uses state-level sales tax rather than a federal VAT.

Can businesses reclaim VAT on their purchases?+

Yes. VAT-registered businesses can reclaim input VAT paid on goods and services used for business purposes. This is done through periodic VAT returns submitted to the tax authority. If a business's input VAT exceeds output VAT in a period, they receive a refund. This is why the cost of VAT is ultimately borne only by end consumers, not by businesses in the supply chain.

What is the difference between VAT inclusive and exclusive prices?+

VAT-inclusive price (gross) already includes the tax. VAT-exclusive price (net) is the base price before tax is added. To remove VAT: net = gross / (1 + VAT rate). For example, with 20% VAT, a Rs 1,200 inclusive price gives a net of Rs 1,000. This calculator handles both directions instantly.

How is VAT different from GST?+

VAT operates at the state level in many countries (including pre-2017 India). GST is a unified national tax replacing multiple state and central taxes. GST uses a dual structure (CGST + SGST/IGST) with seamless input tax credit across state borders, which VAT did not allow. India replaced state VAT with GST in July 2017.

How do businesses claim back VAT they have paid?+

Registered businesses claim input tax credit (ITC) for VAT paid on purchases used in their taxable activities. They deduct input VAT from output VAT (charged to customers) and pay/receive only the net difference. This is the core mechanism that prevents tax cascading. In India, this is called GST input tax credit under the GST system.

Which countries use VAT and at what rates?+

VAT is used in over 160 countries. Standard rates vary widely: UK 20%, EU average 21%, Australia (GST) 10%, Canada (GST) 5%, India (GST) 18% standard rate. The US does not have a federal VAT, using state-level sales taxes instead. Most countries use reduced rates for essentials like food and medicine.

🔗 Related Calculators

What is VAT and how does it work?

VAT (Value Added Tax) is an indirect consumption tax levied at each stage of the production and distribution chain. Unlike a sales tax (charged only at the point of final sale), VAT is collected at every stage - raw material supplier, manufacturer, wholesaler, retailer. Each business charges VAT on its sales (output VAT) and reclaims VAT paid on its purchases (input VAT). Only the end consumer bears the full VAT cost. This system makes VAT extremely efficient to collect and very difficult to evade.

What is the standard VAT rate in the UK?

The UK standard VAT rate is 20%. There is also a reduced rate of 5% applied to items like home energy (gas and electricity), children's car seats, and some health products. A zero rate (0%) applies to most food, children's clothing, books, newspapers, and medications. Businesses with taxable turnover above £90,000 (as of 2024) must register for VAT and charge it on their sales.

How do I calculate the price before VAT if I only know the VAT-inclusive price?

To find the ex-VAT (net) price from a VAT-inclusive price, divide the gross price by (1 + VAT rate). For a 20% VAT rate: Net = Gross ÷ 1.20. For example, if an item costs £120 inclusive of 20% VAT, the net price is £120 ÷ 1.20 = £100, and the VAT amount is £20. This calculator does this automatically when you select the 'Remove VAT' mode.

Which countries use VAT and what are the rates?

Over 170 countries worldwide use VAT or an equivalent consumption tax. Key rates: UK 20%, Germany 19%, France 20%, Italy 22%, Sweden 25%, Australia GST 10%, Canada GST 5%, New Zealand GST 15%, South Africa 15%, India GST (5-28% depending on goods). The US is a notable exception - it uses state-level sales tax instead of a federal VAT.

Can I reclaim VAT on business purchases?

Yes, if your business is VAT-registered, you can reclaim input VAT paid on goods and services purchased for business use. You report output VAT (charged on your sales) and input VAT (paid on your purchases) in periodic VAT returns to HMRC (UK) or your country's tax authority. If input VAT exceeds output VAT in a period, you receive a refund. This is why VAT-registered businesses are largely unaffected by VAT costs - only end consumers bear the final burden.

How much VAT would I pay on a £500 purchase in the UK?

At the standard UK VAT rate of 20%: VAT = £500 × 20% = £100. Total price = £600. If the £500 is the VAT-inclusive price: Net = £500 / 1.20 = £416.67. VAT = £500 - £416.67 = £83.33. The distinction between 'add VAT to £500' vs 'remove VAT from £500' is crucial - always clarify whether the starting amount is the net price or the inclusive price.

What is VAT exempt vs zero-rated in the UK?

Zero-rated items (0% VAT) are still VAT taxable in principle but charged at 0% - businesses can still reclaim input VAT on costs related to zero-rated supplies. Examples: most food, children's clothing, books, passenger transport. VAT-exempt items are entirely outside the VAT system - businesses cannot charge VAT or reclaim input VAT on related costs. Examples: financial services, education, healthcare, and most property rentals. The distinction matters significantly for business VAT accounting.

How is VAT different from GST?

📌 Quick Tips

💡When comparing prices across countries, always strip VAT first - net prices are what matter for true cost comparison.

💡In the UK, most food, children's clothing, and books are zero-rated (0% VAT), while most consumer goods carry 20%.

💡B2B buyers who are VAT-registered can reclaim input VAT - so the true cost to them is always the ex-VAT price.

💡Try the example values first to understand how each input affects the result.

💡Double-check your units before calculating — mixing metric and imperial is the most common source of errors.