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.
A common question
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 23 September 2026.
For general information and planning, not personalised financial or tax advice. Verify important decisions with a qualified adviser.