VAT Calculator

What this calculator does. It works in both directions: enter a net (pre-VAT) price and a rate to add VAT and see the gross total, or enter a gross (VAT-inclusive) price to back out the net amount and the VAT portion. It's the everyday tool freelancers, small businesses and finance teams reach for when raising invoices, checking receipts or quoting prices.

How the calculation works. VAT is a flat percentage of the net price. To add VAT, multiply the net by (1 + rate ÷ 100). To remove VAT from a gross price, divide by (1 + rate ÷ 100) — never simply subtract the percentage, which gives a noticeably wrong answer at higher rates. The result is shown as three figures (net, VAT, gross) so the breakdown is immediately clear.

A worked example. A freelance designer quotes £800 for a project at the UK standard 20% rate. Adding VAT: £800 × 1.20 = £960 total invoice, with £160 of VAT to be paid to HMRC. Working in reverse from a £960 receipt at 20%: £960 ÷ 1.20 = £800 net, confirming £160 VAT. Note the trap — subtracting 20% from £960 gives £768, which is £32 short of the right answer.

Why this matters. Getting VAT right is the difference between a clean invoice and one you have to reissue, and between accurate quotes and ones that leave you out of pocket. For consumers, working backwards from a gross receipt lets you check what tax you've actually paid — useful for expense claims and for understanding the real cost of a purchase before tax.

When to use it / when not to. Use it for UK VAT, EU VAT and GST in countries that use a simple percentage-on-net model (Australia, New Zealand, UAE). For US transactions, use the Sales Tax calculator — US sales tax is structured differently and varies by state, county and city. For zero-rated and exempt UK goods, enter 0% as the rate; the net and gross will be the same, which is mathematically correct.

Common mistakes. Subtracting the VAT percentage from a gross figure rather than dividing (the most common error — always divide); using 20% on items that are reduced-rated or zero-rated in the UK; and forgetting that some services like insurance and postage are exempt entirely, not just zero-rated, so no VAT calculation applies at all.