VAT Tax Calculator UK 2026 – Add or Remove VAT Instantly

How do I calculate 20% VAT tax?

To add 20% VAT to a net price, multiply the net amount by 1.20:

Gross = Net × 1.20

Example: £500 net → £500 × 1.20 = £600 gross

To remove 20% VAT from a gross price (reverse VAT), divide the gross amount by 1.20:

Net = Gross ÷ 1.20

Example: £600 gross → £600 ÷ 1.20 = £500 net

The VAT amount itself is always the difference between the gross and net figures. For 20% VAT on a £500 net price, the VAT is £100.

UK VAT Rates in 2026

HMRC applies three VAT rates in the UK. Most goods and services fall under the standard rate.

Rate	%	Applies to
Standard	20%	Most goods and services — building work, labour, materials
Reduced	5%	Home energy, children's car seats, some renovation work
Zero	0%	Food, children's clothing, books, new residential builds

UK VAT Registration in 2026: What You Need to Know

The UK VAT registration threshold remains frozen at £90,000 for the 2026/27 tax year. While there was previous speculation about a reduction, the government has maintained this level to support small businesses.

When do I need to register?

You must register for VAT with HM Revenue & Customs if either of the following apply:

The Backward Look

Your total VAT-taxable turnover for the last 12 months (on a rolling basis, not a calendar year) exceeds £90,000.

The Forward Look

You expect your turnover to exceed £90,000 in the next 30 days alone.

If your turnover exceeds the threshold, you must register within 30 days of the end of the month in which you went over.

Once registered, you must:

Charge VAT on all taxable sales (usually at the 20% standard rate)
Submit VAT Returns (usually quarterly) using HMRC-compatible software under Making Tax Digital (MTD) rules
Keep Digital Records of all sales and business expenses
Pay VAT Owed to HMRC by the specified deadline

Voluntary Registration

You can choose to register voluntarily even if your turnover is below £90,000. This is often beneficial if you sell primarily to other VAT-registered businesses who can reclaim the VAT, or if you want to reclaim VAT on your own business start-up costs.

Frequently Asked Questions

What is the difference between net and gross?

Net is the price before VAT is added. Gross is the total price including VAT. If you charge a customer £600 including 20% VAT, the net amount is £500 and the VAT is £100.

How do I work out VAT from a gross amount?

To extract VAT from a gross (VAT-inclusive) price at 20%, divide by 1.20. The result is the net price. Subtract the net from the gross to get the VAT amount. Use the 'Remove VAT' toggle above to do this automatically.

What is the VAT rate for building and construction work?

Most building and construction work is charged at the standard 20% VAT rate. However, some residential renovation and conversion work may qualify for the 5% reduced rate. New residential builds are typically zero-rated. Always confirm with HMRC or your accountant.

Can I reclaim VAT on business purchases?

Yes — if you are VAT-registered, you can reclaim the VAT you pay on business purchases (input tax) against the VAT you collect from customers (output tax). You pay HMRC the difference.

What is an online VAT calculator used for?

An online VAT calculator helps you quickly work out how much VAT to add to a net price, or how much VAT is included in a gross price. It saves time and avoids manual calculation errors — especially useful for tradespeople quoting jobs on-site.

What is import VAT?

Import VAT is charged on goods brought into the UK from outside Great Britain. It is calculated on the customs value of the goods plus any customs duty. Import VAT can usually be reclaimed by VAT-registered businesses.

VAT Tax Calculator