VAT calculator
Add VAT or take it off. Taking it off is where people go wrong: you divide by 1.2, and subtracting 20% gives an answer that is four pounds out on every hundred and twenty. Nothing you type here leaves your browser — it is worked out on your own device, so there is nothing to send and nothing to log.
You cannot remove 20% by subtracting 20%
This is the one that costs people money, and it always costs them in the same direction — underpaying the tax.
| Add 20% to £100 | £100 × 1.2 = £120 |
|---|---|
| Take 20% off £120 | £120 × 0.8 = £96 — and that is wrong |
| The right way | £120 ÷ 1.2 = £100 |
The reason is simple once it is said: the 20% was charged on the smaller number and you are trying to take it off the bigger one. The percentage you would actually subtract is 16.667%, not 20.
The shortcut worth remembering
At 20% VAT, one sixth of the gross price is the VAT. Exactly one sixth — 20/120. Divide the receipt total by six and you have the VAT without a calculator.
At 5% it is one twenty-first. At the old 17.5% it was seven forty-sevenths, which is why nobody used a shortcut then. The tool above gives the fraction for whatever rate you put in.
Zero-rated is not the same as exempt
Both mean no VAT is charged to the customer, and they are completely different to the business.
| Zero-rated | VAT is charged, at 0%. The business can still reclaim the VAT on its own costs. Most food, children's clothes, books, newspapers. |
|---|---|
| Exempt | The transaction is outside VAT altogether. The business cannot reclaim. Postage stamps, insurance, most financial and property transactions. |
For a business selling zero-rated goods, that distinction is the difference between a VAT refund every quarter and none.
Rounding is a decision and HMRC lets you pick
A VAT-registered trader may round the VAT on a total invoice down to the nearest penny, or round each line to the nearest penny. Those give different totals, and both are lawful. This page does the arithmetic in full and rounds once, at the end, half away from zero — which is what invoices do, and the opposite of the banker's rounding a spreadsheet may be using.
Across two hundred lines the two approaches drift apart by a few pence. Across a year of invoices it is worth knowing which one your accounting software chose.
The rates, and when they were checked
The UK standard rate has been 20% since 4 January 2011; before that it was 17.5%. These were checked against gov.uk on 21 September 2026. Rates change, and which rate applies to what you are selling is genuinely complicated — ask HMRC or an accountant. This is arithmetic, not tax advice.
What it will not do
- It will not tell you which rate applies. That is the hard part and it is a question for HMRC.
- It will not handle the flat rate scheme, the margin scheme, or partial exemption.
- It will not know about any country's VAT but the rate you type in. The arithmetic is the same everywhere; the rates and the rules are not.