This free online VAT calculator adds VAT to any net price or removes VAT from any gross total at any tax rate β showing the net price, the VAT amount, and the gross figure together in one result. Use the Add VAT mode when you have a price before tax and need the final total. Use Remove VAT to calculate VAT backwards from a VAT-inclusive gross price to find the original net and the VAT amount hidden inside. This VAT tax calculator works for any country and any rate β UK 20%, EU 17β27%, Australia GST 10%, UAE 5%, or any custom rate you enter.
VAT trips up shoppers, freelancers, and even experienced bookkeepers because the "remove" direction is not simply subtracting the percentage. This calculator applies the correct method automatically so your invoices, quotes, and expense claims are right the first time.
VAT Calculation Formula β Add and Remove VAT
The VAT calculation formula depends on direction. To add VAT:
VAT Amount = Net Price Γ (VAT Rate Γ· 100) | Gross = Net + VAT Amount
To remove VAT (a reverse VAT calculation from a gross figure):
Net = Gross Γ· (1 + VAT Rate Γ· 100) | VAT Amount = Gross β Net
The remove direction is where most manual errors occur β people subtract the percentage directly (multiplying by 0.80 to remove 20%), which gives the wrong answer. Removing 20% VAT from Β£120 by multiplying by 0.80 gives Β£96, but the correct net is Β£120 Γ· 1.20 = Β£100. At 20%, a handy shortcut is that the VAT element is always one sixth of the gross. This calculator uses the correct division method automatically β the example above is the one that trips up even experienced accountants under time pressure, which is exactly why a reliable tool matters.
VAT Rates Around the World β UK, EU, Australia, UAE
As the Wikipedia VAT article documents, Value Added Tax is applied in over 170 countries, with significantly varying rates:
- United Kingdom β standard rate 20%; reduced rate 5% (domestic fuel, children's car seats); zero rate (most food, children's clothing, books). Per HMRC's official VAT rates guidance, businesses must register once turnover exceeds the registration threshold.
- European Union β standard rates range from 17% (Luxembourg) to 27% (Hungary). The European Commission VAT information details each member state's rates and reduced categories.
- Australia β GST (Goods and Services Tax) at a flat 10%. Fresh food, medical services, and some educational courses are GST-free.
- UAE β 5% VAT introduced in 2018, with zero-rated categories including healthcare and education.
Because rates and exemptions vary widely, this online VAT calculator accepts any rate β enter the exact percentage that applies to your country and product category. For Ireland, enter 23% (the standard rate); for Germany, 19%; for any other jurisdiction, simply type its rate.
Excluding VAT vs Including VAT β How to Present Prices
The question of excluding VAT vs including VAT in displayed prices matters practically for businesses. B2B sellers typically display prices excluding VAT, since business buyers reclaim it β the VAT is then shown separately on invoices. B2C retailers typically display VAT-inclusive prices, since consumers cannot reclaim it and the gross total is what they pay. This affects quoting, invoicing, and online shop price display differently.
The self-employed use of this calculator is particularly important for freelancers: when you charge a client Β£1,000 + VAT, you receive Β£1,200 but owe Β£200 to HMRC β so your effective income from the transaction is Β£1,000, not Β£1,200. Mixing up VAT-inclusive and VAT-exclusive pricing is one of the most common errors that newly VAT-registered sole traders make. Always confirm with a new client whether your quoted prices are net (excluding VAT) or gross (including VAT).
VAT Refund Calculator β Reclaiming VAT
Businesses registered for VAT can reclaim the VAT paid on eligible business expenses β a process managed through periodic VAT returns. The reverse function of this tool works as a VAT refund calculator: it shows the VAT amount embedded in any VAT-inclusive purchase, which is the figure eligible for reclaim. Enter the gross amount you paid (including VAT) and the applicable rate, then switch to Remove VAT mode β the VAT amount shown is what you can potentially reclaim.
For tourist VAT refunds, the same reverse calculation applies: a UK 20% VAT refund on a Β£120 purchase returns Β£20 (the embedded VAT). Note that tourist refund schemes typically apply to standard-rated goods only, and processing fees may reduce the actual amount you receive. A full VAT return for a business involves more complex net VAT calculations across all sales and purchases β this tool handles the per-transaction arithmetic that feeds into those broader return calculations.
Setting VAT-Inclusive Prices That Still Hit Your Margin
If you sell to consumers, your headline price must include VAT β but your profit is based on the net figure. A common pricing mistake is setting a round gross price (say Β£99) without checking what net revenue remains after VAT. On a Β£99 VAT-inclusive price at 20%, the net is Β£82.50 and Β£16.50 is VAT owed to the tax authority. To price from the other direction, decide your required net price, then use Add VAT mode to find the gross price to display. To set a net price that achieves a target profit, pair this tool with our profit margin calculator, and use the percentage calculator for any related percentage work. If you sell into the US, note that American sales tax works differently β see the comparison below.
Frequently Asked Questions
Divide the VAT-inclusive price by 1 plus the VAT rate as a decimal. To remove 20% VAT: divide by 1.20. To remove 5% VAT: divide by 1.05. The common mistake is to subtract the percentage directly (e.g. Γ 0.80), which gives the wrong answer. This VAT calculator applies the correct reverse calculation automatically in Remove VAT mode, showing the exact net price and VAT amount from any gross total.
20% VAT on a Β£100 net price gives a VAT amount of Β£20 and a gross (VAT-inclusive) total of Β£120. To remove VAT from the Β£120 gross: Β£120 Γ· 1.20 = Β£100 net, with Β£20 VAT inside. This is the UK standard rate applied to the most common round number β this calculator handles it at any amount and any rate, including non-round figures that are harder to work out mentally.
Both are consumption taxes, but they work differently. VAT is collected at each stage of the supply chain (manufacturer β wholesaler β retailer β consumer), with each stage reclaiming the VAT paid on inputs. Sales tax β used in the USA β is collected only at the final sale. The consumer ultimately pays a similar amount, but VAT produces records at every stage that improve compliance. Most of the world uses VAT; the US is the major exception, using state-level sales tax instead.
A VAT invoice usually lists the net (VAT-exclusive) amount for each line, the VAT rate applied, the total VAT amount, and the gross total due. Business customers use the net figure for their accounts and reclaim the VAT; the gross figure is what actually gets paid. Use Add VAT mode to generate all three figures from a net price when preparing a quote or invoice.
In addition to the standard rate, the UK and EU apply reduced rates (e.g. UK 5% on domestic fuel and child car seats) and zero rates (e.g. most UK food, books, and children's clothing). Zero-rated is not the same as VAT-exempt: zero-rated goods still count as taxable at 0%, letting the seller reclaim input VAT. Enter the specific rate for your product category into the rate field.
Yes β enter the exact VAT or GST rate that applies to your country and product category. This online VAT calculator works for UK 20%, EU rates (17β27%), Australian GST (10%), UAE VAT (5%), or any other rate. For specific country guidance, consult the official tax authority: HMRC for the UK and the European Commission for EU member state rates.
Yes β completely free with no sign-up, no account, and no usage limits. All calculations run in your browser and nothing you enter is stored or transmitted. Use it for invoices, quotes, expense claims, or shopping checks as often as needed. Browse all our tools at the free tools hub.