VAT Calculator — Add or Remove VAT Instantly

What is a VAT?

VAT (Value Added Tax) is a consumption tax charged at each stage of the supply chain in the UK and over 170 other countries. In the UK, VAT is charged to consumers on most goods and services, and VAT-registered businesses can reclaim the VAT they pay on purchases (input VAT) against the VAT they collect from customers (output VAT). UK VAT rates in 2026: Standard rate (20%) applies to most goods and services including electronics, clothing, professional services, and restaurant meals. Reduced rate (5%) applies to domestic fuel and power, children's car seats, sanitary products, and certain energy-saving materials. Zero rate (0%) applies to food (most unprocessed food), children's clothing, books, newspapers, and passenger transport. Pakistan equivalent — GST: Pakistan charges a General Sales Tax (GST) at 18% on most goods and services. Businesses registered with FBR must collect and remit GST. The UK VAT registration threshold for businesses is £90,000 annual turnover (2026). UK VAT-registered businesses must submit VAT returns quarterly through HMRC's Making Tax Digital (MTD) scheme. The return calculates VAT payable or refundable: if output VAT collected exceeds input VAT reclaimed, you pay the difference to HMRC; if input VAT exceeds output VAT, HMRC issues a refund. Note that VAT-exempt supplies (insurance, financial services, residential property rental) differ from zero-rated supplies — businesses making exempt supplies cannot reclaim input VAT on related costs, making VAT classification a meaningful cost consideration.

How to Use This Calculator

Enter the price amount. Select the VAT rate that applies — UK standard 20%, UK reduced 5%, Pakistan GST 18%, or enter a custom rate. Choose your calculation direction: Add VAT adds the tax on top of a net (ex-VAT) price to give the gross (VAT-inclusive) amount — use this when pricing to customers or quoting a job. Remove VAT strips the tax from a gross price to reveal the net amount — use this when working backwards from a VAT-inclusive receipt to find the ex-VAT cost for your accounts. Click Calculate to instantly see the VAT amount, net price, and gross price. The formula for removing 20% VAT manually is: Net = Gross ÷ 1.20. For 5% VAT: Net = Gross ÷ 1.05.

💡 Pro Tips

• ✓UK standard VAT rate is 20% — applies to most goods and services since 2011.
• ✓Reduced 5% VAT applies to children's car seats, home energy, and sanitary products.
• ✓Zero-rated items include most food, books, children's clothing — not exempt, but charged at 0%.
• ✓VAT-registered businesses can reclaim input VAT paid on business expenses.
• ✓Always get a VAT receipt for business purchases — you need it to reclaim VAT.
• ✓UK VAT registration threshold: £90,000 annual turnover (2026).
• ✓To manually remove 20% VAT: divide the gross price by 1.20.
• ✓Non-UK businesses selling digitally to UK customers must register for UK VAT.

Who Uses This Calculator?

UK small business owners adding VAT to invoices and quoting clients on net versus gross prices. Accountants preparing quarterly VAT returns and reconciling output VAT collected against input VAT reclaimed. Consumers verifying how much VAT is embedded in a purchase before buying. Freelancers and sole traders who recently crossed the £90,000 registration threshold calculating VAT on their historical sales to assess their first VAT return. Pakistani businesses calculating 18% GST on sales invoices for FBR compliance. E-commerce sellers determining VAT obligations on cross-border sales to UK customers. Retail buyers comparing ex-VAT and VAT-inclusive prices when evaluating supplier quotes. Anyone checking how much of a stated price is tax versus actual product cost.

Frequently Asked Questions