- Net
- £100.00
- VAT
- £20.00
- Gross
- £120.00
Formula: adding VAT, gross = net × (1 + rate). Removing VAT, net = gross ÷ (1 + rate). VAT is gross minus net. Results are rounded to the penny for display only.
Adding VAT and removing VAT
To add VAT, multiply the net price by one plus the rate: at 20%, a net price of £100 becomes £120. To remove VAT from a gross price, divide by one plus the rate: £120 including VAT at 20% is £100 net and £20 VAT.
A common mistake is to take 20% off a gross price to find the net price. That gives £96 from £120, which is wrong, because the VAT was 20% of the net price, not of the gross.
UK VAT rates
The UK has a standard rate of 20%, a reduced rate of 5% and a zero rate, and some goods and services are exempt. Which rate applies depends on what is being sold; GOV.UK lists VAT rates on goods and services. This calculator does the arithmetic only and is not tax advice.
VAT in a shop's till
Retail software records the VAT on every sale so the totals are ready when a return is due. Aevornix POS calculates tax on each sale and keeps double-entry books on the shop's own computer; see how to choose POS software for what to look for.
Frequently asked questions
How do I work out the VAT in a price that includes VAT?
Divide the gross price by 1.2 for the 20% rate to get the net price, then subtract the net from the gross. For £60 including VAT, the net is £50 and the VAT is £10.
Is VAT 20% of the gross price?
No. VAT is a percentage of the net price. At the standard rate it is one sixth of the gross price, not one fifth.
Does this calculator store my figures?
No. It runs in your browser and nothing you enter is saved or sent.
