VAT calculator (add or remove VAT)

This calculator gives startups an estimate using 2026/27 tax rates.

This is an estimate based on 2026/27 rates and standard assumptions. Your exact position depends on your circumstances, and the result is not personal tax advice.

To add 20% VAT, multiply the net figure by 1.2. To remove VAT from a gross figure, divide by 1.2, and the VAT is the difference. You must register for VAT once taxable turnover passes £90,000 in any rolling 12-month period.

Adding and removing VAT

Adding VAT: net × 1.2 gives the gross (VAT-inclusive) price at the standard 20% rate. Removing VAT: gross ÷ 1.2 gives the net price, and the difference is the VAT element. A common mistake is taking 20% off a gross figure to find the net. That gives too low a net figure, because the 20% was added to the net amount, which is smaller than the gross.

When you must register

You must register for VAT once your taxable turnover passes £90,000 in any rolling 12-month period, or if you expect to pass it in the next 30 days alone. You can also register voluntarily before that, which can suit a business whose customers are VAT-registered and reclaim the VAT you charge.

Setting VAT aside Once you are registered, the VAT you charge is owed to HMRC. Move it into a separate account when invoices are paid, so the money is there when the quarterly return is due.

Standard VAT accounting, cash accounting (paying VAT when your customers pay you) and the Flat Rate Scheme each affect your cashflow differently, and we set clients up on the scheme that suits them.

Common questions

How do I add 20% VAT to a price?

Multiply the net amount by 1.2. For example, £1,000 + 20% VAT = £1,200, of which £200 is VAT.

How do I remove VAT from a gross price?

Divide the gross amount by 1.2 (for the 20% rate). For example, £1,200 ÷ 1.2 = £1,000 net, so the VAT was £200. Taking 20% off the gross figure gives the wrong answer.

What is the VAT registration threshold?

£90,000 of taxable turnover in any rolling 12-month period. You must also register if you expect to exceed it in the next 30 days alone.

What are the UK VAT rates?

The standard rate is 20%, a reduced rate of 5% applies to some goods (like domestic energy), and a zero rate of 0% applies to items such as most food and children's clothing.

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VAT calculator (add or remove VAT)

Adding and removing VAT

When you must register

Common questions

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