VAT calculator (UK)
Add or remove UK VAT in one step: £100 plus 20% VAT is £120, and a VAT-inclusive £120 holds £20 of VAT, a sixth of the price. The reduced rate is 5% and the zero rate 0%.
Updated:
With VAT
£120.00
VAT
£20.00
Without VAT
£100.00
Worked out in your browser; the amounts you type are not sent anywhere.
The UK VAT rates
| Rate | For example |
|---|---|
| 20% (standard) | Most goods and services. |
| 5% (reduced) | Some goods and services, such as children’s car seats and home energy. |
| 0% (zero) | Zero-rated goods and services, such as most food and children’s clothes. |
| Exempt | No VAT is charged, for example on postage stamps, and financial and property transactions. |
The VAT fraction: the VAT inside a price
HMRC’s VAT fraction gives the VAT inside a VAT-inclusive price in one step: 20/120, which is 1/6, at 20%, and 1/21 at 5%.
£54.00 including VAT at 20%: 54.00 × 1/6 = £9.00 VAT, so £45.00 without VAT £21.00 including VAT at 5%: 21.00 × 1/21 = £1.00 VAT, so £20.00 without VAT
Taking 20% off a VAT-inclusive price does not remove the VAT. 20% of £120 is £24, but the VAT inside £120 is £20: one sixth.
Food in a shop: zero-rated, with exceptions
Most food is zero-rated, but HMRC lists items that are always standard-rated, and a corner shop sells plenty of them: ice cream, confectionery (apart from cakes and some biscuits), crisps, roasted or salted nuts and some other savoury snacks, alcoholic drinks, and other drinks such as soft drinks. Food supplied in the course of catering, including hot takeaway food, is standard-rated too.
For a mixed receipt, press Add an item at another rate and give each line its rate; the VAT is worked out per rate and added up.
A receipt with £6.00 of bread and eggs (0%) and £4.80 of crisps and soft drinks (20%), prices including VAT: VAT on the 20% items: 4.80 × 1/6 = £0.80 VAT on the zero-rated items: £0.00 Total £10.80, of which £0.80 is VAT
When you must register for VAT
You must register when your total taxable turnover for the last 12 months goes over £90,000. For example, if on 15 July your turnover for the last 12 months is £100,000, you must register by 30 August, and your registration takes effect on 1 September (GOV.UK).
VAT and customers who pay later
If regular customers buy on account and settle at the end of the week or month, write each sale at the price they pay, VAT included. Baki Fast is a credit book, not invoicing software: it does not issue VAT invoices, so keep issuing those from your till or accounts. Work out margins on prices without VAT: profit margin calculator.
Sources
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This page is general information, not legal, tax or financial advice. Rules differ by country and change over time; check with an accountant or a lawyer before you decide.
Questions
How do I work out the price without VAT?
Divide the VAT-inclusive price by 1.2, or by 1.05 at the reduced rate. £240 ÷ 1.2 = £200, so the VAT is £40. Taking 20% off £240 would give £192, which is wrong.