What is the VAT registration threshold?

Businesses must register for VAT if their taxable turnover exceeds £90,000 in any rolling 12-month period, or if they expect to exceed it in the next 30 days. The deregistration threshold is £88,000. Both thresholds changed from £85k/£83k on 1 April 2024.

How do I remove VAT from a gross price?

Divide the gross figure by 1.2 to find the net amount at the 20% standard rate, or divide by 1.05 for the 5% reduced rate. For example, £120 gross divided by 1.2 = £100 net, with £20 VAT. Adding VAT is the reverse: multiply the net by 1.2.

What is the VAT Flat Rate Scheme?

The Flat Rate Scheme lets small businesses with turnover under £150,000 pay a fixed percentage of their VAT-inclusive turnover to tax authority instead of calculating input and output VAT separately. The rate varies by sector from 4% to 16.5%, and limited-cost traders pay 16.5% regardless of sector.

Do I charge VAT on exports and services outside the UK?

Exports of goods outside the UK are usually zero-rated with evidence of export. For services, the place of supply rules apply: B2B services are generally supplied where the customer belongs (reverse charge), while B2C services are often supplied where the supplier belongs. EU rules no longer apply automatically since Brexit.

VAT Calculator UK – Add or Remove VAT

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Calculate your margin

Check gross or net margin after VAT is included in pricing.

Work out break-even

Find the sales volume needed to cover fixed and variable costs.

Rates & sources2026/27

UK VAT rates. Standard 20% on most goods and services; reduced 5% on domestic energy, children’s car seats, etc.; zero on food, books, children’s clothes.

Rates used for 2026/27
Band / figure	Rate
Standard rate	20%
Reduced rate	5%
Zero rate	0%
Registration threshold	£90,000 turnover

Source: HMRC — VAT rates — source checked for 2026/27.

When to use this calculator

Before accepting a pay change, bonus, pension contribution or salary-sacrifice option.
When you want a simple take-home estimate before payroll or filing.
When you are approaching the £100,000 income level and want to see the personal allowance taper.
When you need to convert between hourly, monthly and annual pay.

Example: checking the VAT impact on a business quote

Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.

Example: checking the VAT impact on a business quote
Input	Value
Net service fee	£1,200
VAT rate	20%
Gross invoice total	£1,440
Decision question	Quote gross correctly while protecting margin

A pricing decision made on the wrong side of VAT can distort revenue, margin, and customer communication at the same time. It is a small calculation with a high error cost.

How to read your results

Net

The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.

Tax

Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.

Gross

The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.

Method & assumptionsAuthoritative sources

This calculator handles three common VAT calculations: adding VAT to a net amount, removing VAT from a gross amount, and showing the VAT element within a price. The UK standard rate is 20%, the reduced rate is 5%, and zero-rated goods attract 0% VAT (though they are still taxable supplies, unlike exempt goods).

To add VAT: multiply the net amount by the VAT rate and add to the net. To extract VAT from a gross price at 20%: divide by 6. The calculator applies these formulae automatically. Note that it covers GB VAT only — Northern Ireland has specific rules for goods transactions with the EU. Always verify which rate applies to your specific supply using tax authority guidance, as misapplying VAT rates can result in penalties on inspection.

Common mistakes

!Entering gross income when you really want take-home pay, or vice versa.
!Ignoring pension contributions, deductions or local tax rules that change the result.
!Comparing monthly and annual figures without standardising them first.
!Overlooking National Insurance or student-loan plan differences that apply to you.

What to do next

Check the same scenario with related pay or deduction calculators.
Keep a copy of the assumptions so you can compare the next tax year or pay period.
If you are self-employed, compare this result with the self-employment tax calculator.
Check whether a small pension contribution change moves take-home pay more than you expect.

Go deeper — 1 guide reference this calculator

UK Corporation Tax: 19%, 25% and the 26.5% Marginal Band Explained
How the post-April-2023 UK Corporation Tax structure works — Small Profits Rate, main rate, marginal relief, associated-company rules, filing deadlines and deductible costs.

Frequently asked

The standard rate is 20%, the reduced rate is 5% (domestic fuel, childrens car seats, some energy-saving materials) and the zero rate is 0% (most food, childrens clothing, books, newspapers). Some items are VAT-exempt, which is different from zero-rated as it affects input VAT recovery.

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