How it works
Gross = net × (1 + VAT rate). Net = gross ÷ (1 + VAT rate).
A worked example
£100 before VAT becomes £120 at 20%. Removing 20% VAT from £120 gives £100.
What to keep in mind
Choose the rate applicable to the goods or services. Exempt and outside-scope supplies have different treatment from zero-rated supplies.
How to add VAT
Multiply the net price by 1.2 for 20% VAT. £250 before VAT becomes £300, with £50 of VAT. For the 5% reduced rate, multiply by 1.05.
How to remove VAT
Divide the VAT-inclusive price by 1.2 for 20% VAT. £250 including VAT is £208.33 before VAT, with £41.67 of VAT. Taking 20% off the gross price gives the wrong answer.
UK VAT rates
The standard rate is 20% and covers most goods and services. The reduced rate of 5% applies to items such as domestic energy and children’s car seats. Zero-rated items, such as most food and children’s clothes, are VAT-able at 0%.
Frequently asked questions
How do I calculate 20% VAT?
Multiply the net amount by 0.2 to find the VAT, or by 1.2 to find the total including VAT.
What is the VAT on £100?
At 20%, £20, making £120 in total. If £100 already includes VAT, the VAT part is £16.67.
Why not subtract 20% to remove VAT?
VAT is a percentage of the net price. Dividing the gross price by 1.2 reverses a 20% addition.
Sources & rates
Rates checked on 7 October 2026.
For general information and planning, not personalised financial or tax advice. Verify important decisions with a qualified adviser.