VAT Calculator UK 2026-27
Add it, remove it, or find what's hiding inside the price.
Add or remove VAT at the standard 20%, reduced 5%, zero or any custom rate — penny-accurate. Check the £90,000 registration threshold and work out the VAT a business owes HMRC each quarter.
Rates verified against GOV.UK, July 2026. Exempt and zero-rated items differ — see below.
Adding and removing VAT correctly
Adding
Net × 1.20 = gross. A £1,500 invoice becomes £1,800 including £300 VAT. Show net, VAT and gross separately on VAT invoices, with your VAT number.
Removing — the common mistake
Gross ÷ 1.20 = net. £1,800 including VAT is £1,500 net + £300 VAT. Taking 20% of the gross (£360) is wrong — VAT is 20% of the net. The quick check: at 20%, VAT is always exactly one sixth of the gross.
Standard, reduced, zero — and exempt
| Rate | Applies to | VAT fraction |
|---|---|---|
| 20% standard | Most goods and services | 1/6 of gross |
| 5% reduced | Domestic energy, children's car seats, mobility aids | 1/21 of gross |
| 0% zero-rated | Most food, books, children's clothes, public transport | — |
| Exempt | Insurance, education, health, postage | — |
Zero-rated is not the same as exempt. Zero-rated sales are still taxable supplies, so the business reclaims input VAT on its costs; exempt supplies sit outside the system and block input-VAT recovery. The line can be famously fine — hot takeaway food is standard-rated while a cold sandwich is zero-rated.
The £90,000 threshold and what follows
Registration is compulsory once taxable turnover passes £90,000 in any rolling 12-month window — not the tax year — or if you'll pass it in the next 30 days. Watch the rolling total monthly; late registration means penalties plus the uncharged VAT. Deregistration is available below £88,000.
Once registered: charge VAT on taxable sales, reclaim input VAT on business costs, and file quarterly returns through Making Tax Digital software. Voluntary registration below the threshold can pay off when your customers are VAT-registered businesses (they reclaim what you charge) and you have significant input VAT to recover.
Simpler VAT for small businesses — sometimes cheaper
Businesses with taxable turnover of £150,000 or less can pay HMRC a fixed sector percentage of gross turnover (roughly 9%–14.5% depending on trade) instead of tracking output and input VAT — while still charging customers 20%. There's a 1% discount in the first registered year.
The catch: limited-cost businesses (goods under 2% of turnover) must use 16.5%, which usually erases any benefit. Service businesses with real input costs are often better on standard VAT accounting — run both numbers before joining.
❓ Frequently asked Frequently asked questions
How do I add VAT to a price?
Multiply the net by 1.20 at the standard rate: £100 becomes £120. At the 5% reduced rate, multiply by 1.05.
How do I remove VAT from a price?
Divide the gross by 1.20: £120 including VAT is £100 net plus £20 VAT. Don't take 20% of the gross — VAT is 20% of the net.
What is the VAT fraction?
At 20%, the VAT inside any gross price is exactly one sixth — a £250 receipt contains £41.67 of VAT. At 5% the fraction is 1/21.
When must a business register for VAT?
When taxable turnover exceeds £90,000 in any rolling 12 months, or will in the next 30 days. Deregistration is possible below £88,000. Returns are quarterly via Making Tax Digital.
What's the difference between zero-rated and exempt?
Both charge the customer nothing, but zero-rated sales let the business reclaim input VAT on costs; exempt supplies (insurance, education, health) block that recovery.
Have VAT rates changed for 2026-27?
No — standard 20%, reduced 5% and zero rates are unchanged, and the registration threshold remains £90,000 (set in April 2024).
Where these figures come from
All rates and thresholds come from HMRC and GOV.UK — the source of record for UK VAT.
- VAT rates — GOV.UK — VAT rates.
- Registration threshold — GOV.UK — VAT registration.
- Rates on goods and services — GOV.UK — VAT on goods and services.
- Flat Rate Scheme — GOV.UK — Flat Rate Scheme.
Last checked: July 2026. VAT rates and the registration threshold are unchanged for 2026-27.
Select the question that matches where you are right now.
Your result splits any price into its net and VAT elements — the numbers you need for invoices, receipts, expense claims and VAT returns.
Invoicing: quote net, show VAT separately. Expenses: the VAT element is what a registered business reclaims. Pricing: know what you keep after handing HMRC its sixth.
Not a VAT return — partial exemption, margin schemes, imports and reverse-charge rules aren't modelled. An accountant handles the edge cases.
Penny-accurate at the GOV.UK rates for 2026-27. All calculations run in your browser.
Getting VAT right comes down to three judgements: the correct rate, the direction of the calculation, and registration status.
Most errors are rate errors — hot vs cold food, printed books vs stationery, energy at 5%. GOV.UK's goods-and-services list settles arguments.
Adding uses ×1.20; removing uses ÷1.20. Mixing them up misstates prices by 4 percentage points.
Unregistered businesses charge no VAT and reclaim nothing. Past £90,000 rolling turnover, registration is compulsory — and the clock starts when you cross it, not at year end.
For businesses, VAT position is manageable with a little structure.
Check turnover monthly as you approach £90,000 — crossing it unknowingly is the most expensive VAT mistake small businesses make.
Input VAT is only reclaimable with a valid VAT invoice showing the supplier's number. No receipt, no reclaim.
Compare your sector's flat rate against actual output-minus-input VAT before joining — limited-cost status catches many out.
VAT sits alongside the rest of your business and personal tax picture.
Check your margins net of VAT — the sixth you collect was never yours.
Profit margin →