UK VAT Calculator

What Is VAT in the UK?

Value Added Tax (VAT) is a consumption tax applied to most goods and services in the United Kingdom. The standard VAT rate is 20%, although reduced rates of 5% and 0% apply to certain goods and services. Businesses registered for VAT must charge it on taxable supplies and submit VAT returns to HM Revenue & Customs (HMRC).

How to Calculate VAT

To add VAT at 20%, multiply the original price by 1.20. To remove VAT from a VAT-inclusive price, divide the total amount by 1.20.

Example:

• £100 + 20% VAT = £120
• £120 ÷ 1.20 = £100 (original price before VAT)

Who Needs to Register for VAT?

Businesses in the UK must register for VAT if their taxable turnover exceeds the VAT registration threshold set by HMRC. VAT-registered businesses are responsible for charging VAT and reclaiming VAT on eligible business expenses.

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