- Free • No signup required • HMRC compliant
UK VAT Calculator 2026/27
Instantly add or remove VAT from any amount. Supports standard (20%),
reduced (5%), and zero (0%) UK VAT rates. Updated for the 2026/27 tax year.
VAT Calculator
Convert between VAT-inclusive and VAT-exclusive prices.
Calculate VAT
Enter an amount and choose whether to add or remove VAT
Breakdown
VAT at 20%
VAT Amount
£0.00
UK VAT Rates
Standard Rate — 20%
Most goods and services
Reduced Rate — 5%
Home energy, child car seats, etc.
Zero Rate — 0%
Food, children's clothing, books
How to Calculate VAT
- Adding VAT to a Price
When you know the net (excluding VAT) amount
Formula: Net Amount x (1 + VAT Rate ÷ 100)
Example: Adding 20% VAT to £1,000
£1,000 × 1.20 = £1,200.00
Net: £1,000.00 | VAT: £200.00 | Gross: £1,200.00
Example: Adding 5% VAT to £500
£500 × 1.05 = £525.00
Net: £500.00 | VAT: £25.00 | Gross: £525.00
- Removing VAT from a Price
When you know the gross (excluding VAT) amount
Formula: Gross Amount x (1 + VAT Rate ÷ 100)
Example: Removing 20% VAT from £1,200
£1,200 ÷ 1.20 = £1,000.00
Net: £1,000.00 | VAT: £200.00 | Gross: £1,200.00
Example: Removing 5% VAT from £525
£525 ÷ 1.05 = £500.00
Net: £500.00 | VAT: £25.00 | Gross: £525.00
What is VAT?
Value Added Tax (VAT) is a consumption tax levied on the sale of goods and services in the United Kingdom. It is collected by VAT-registered businesses on behalf of HM Revenue & Customs (HMRC) and is one of the UK government's largest sources of revenue, generating over £130 billion annually.
VAT is charged at each stage of the supply chain — from manufacturer to wholesaler to retailer — but only on the value added at each stage. This means businesses can reclaim the VAT they pay on purchases (input tax) against the VAT they charge on sales (output tax), and only pay the difference to HMRC.
Unlike a simple sales tax, VAT is designed to be borne by the final consumer. Businesses act as intermediaries, collecting the tax and passing it to HMRC. This system prevents tax cascading (tax on tax) and makes the UK's VAT one of the most efficient consumption taxes in the world.
VAT was introduced in the United Kingdom on 1 April 1973, replacing the previous Purchase Tax, as a condition of the UK's entry to the European Economic Community (now the EU). The initial rate was 10%, and it has undergone several changes over the decades to reach the current standard rate of 20%.
Current UK VAT Rates (2026/27)
20%
Standard Rate
Most goods and services including electronics, clothing (adult), furniture, professional services, and restaurant meals
5%
Reduced Rate
Domestic energy and fuel, children’s car seats, smoking cessation products, mobility aids, and residential conversions
0%
Zero Rate
Most food, children’s clothing, books and newspapers, public transport, and goods exported outside the UK
Exempt
No VAT
Insurance, financial services, education, health services, postage stamps, burial and cremation, and betting/gaming
Important distinction: Zero-rated items are still VAT-taxable (at 0%), so businesses can reclaim VAT on costs related to these supplies. Exempt items are entirely outside the VAT system — businesses cannot reclaim VAT on costs related to exempt supplies.
Common VAT Calculations at 20%
Quick reference table for common amounts at the standard UK VAT rate of 20%.
| Net (excl. VAT) | VAT (20%) | Gross (incl. VAT) |
|---|---|---|
| £50.00 | £10.00 | £60.00 |
| £100.00 | £20.00 | £120.00 |
| £250.00 | £50.00 | £300.00 |
| £500.00 | £100.00 | £600.00 |
| £1,000.00 | £200.00 | £1,200.00 |
| £2,500.00 | £500.00 | £3,000.00 |
| £5,000.00 | £1,000.00 | £6,000.00 |
VAT Registration
You must register for VAT with HMRC if your taxable turnover exceeds £90,000 in any rolling 12-month period (2026/27 threshold). You must also register if you expect to exceed this threshold in the next 30 days alone.
Once registered, you are required to charge VAT on your sales, submit quarterly VAT returns, and pay any VAT owed to HMRC. You can also reclaim VAT you pay on business purchases and expenses.
Voluntary registration is possible even if your turnover is below the threshold. This can be advantageous if your customers are VAT-registered businesses (as they can reclaim the VAT you charge) or if you have significant VAT-able business expenses.
Flat Rate VAT Scheme
The Flat Rate Scheme is designed for small businesses with a VAT-taxable turnover of £150,000 or less (excluding VAT). Instead of calculating VAT on every individual transaction, you pay a fixed percentage of your gross (VAT-inclusive) turnover to HMRC.
The percentage depends on your type of business. For example, a management consultant pays 14%, while a retailer of food pays 4%. You still charge your customers the standard 20% VAT rate, but you keep the difference between what you charge and what you pay HMRC.
The scheme simplifies VAT accounting significantly, but you cannot reclaim VAT on most purchases (except capital assets over £2,000). A “limited cost business” (spending less than 2% of turnover on goods) must use a flat rate of 16.5%.
- History of UK VAT Rates
| Date | Standard Rate | Notes |
|---|---|---|
| 1 April 1973 | 10% | VAT introduced in the UK |
| 29 July 1974 | 8% | Reduced from 10%; 25% luxury rate added |
| 18 June 1979 | 15% | Single rate introduced |
| 1 April 1991 | 17.5% | Increased by 2.5% |
| 1 December 2008 | 15% | Temporary reduction during recession |
| 1 January 2010 | 17.5% | Restored after temporary cut |
| 4 January 2011 | 20% | Current standard rate |
- Frequently Asked Questions
The current standard UK VAT rate is 20%, which has been in effect since 4 January 2011. There is also a reduced rate of 5% for certain goods and services, and a zero rate (0%) for others.
To add 20% VAT, multiply the net (excluding VAT) amount by 1.20. For example, £100 × 1.20 = £120.00 (where £100 is the net price and £20 is the VAT). For 5% VAT, multiply by 1.05.
To remove 20% VAT from a gross (including VAT) price, divide by 1.20. For example, £120 ÷ 1.20 = £100.00 net. The VAT element is £120 − £100 = £20.00. For 5% VAT, divide by 1.05.
You must register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period (2026/27 threshold). You can also register voluntarily below this threshold, which allows you to reclaim VAT on business purchases.
Zero-rated goods are technically still VAT-taxable but at 0%, so you can reclaim VAT on related business costs. VAT-exempt goods are outside the VAT system entirely — you cannot reclaim VAT on costs related to exempt supplies.
The Flat Rate Scheme lets small businesses (turnover under £150,000) pay a fixed percentage of their total VAT-inclusive turnover to HMRC, rather than calculating VAT on every transaction. The percentage varies by industry (e.g. 14.5% for computer repair, 12% for management consultancy).
Yes, this calculator uses the standard HMRC-compliant formulas for adding and removing VAT. For creating full invoices with VAT, you can use our free Invoice Generator tool after signing up for a KoraKit account.
Most basic food items (bread, vegetables, meat, etc.) are zero-rated. However, catering, restaurant meals, hot takeaway food, confectionery, crisps, and alcoholic drinks are charged at the standard 20% rate.
Need More Than a VAT Calculator?
KoraKit is a free all-in-one startup toolkit with 11 tools for UK entrepreneurs — including a profit margin calculator, AI business name generator, invoice creator, competitor analysis, and more.