UK VAT Rates 2025

Rate	Percentage	Applies To
Standard	20%	Most goods and services
Reduced	5%	Home energy, child car seats, sanitary products
Zero	0%	Food, children's clothes, books, newspapers

How to Calculate VAT

To add VAT: Multiply the net amount by 1.2 (for 20% VAT). For example, £100 + VAT = £100 × 1.2 = £120.

To remove VAT: Divide the gross amount by 1.2 (for 20% VAT). For example, £120 including VAT = £120 ÷ 1.2 = £100 net.

VAT Registration Threshold

You must register for VAT if your taxable turnover exceeds £90,000 in a 12-month period. You can voluntarily register below this threshold. Use our self-employed calculator to work out your tax as a sole trader.

What This Calculator Does

This calculator adds or removes VAT at the standard 20% rate, reduced 5% rate, or zero rate, showing the net, VAT, and gross amounts. It is designed for business owners, freelancers, and anyone needing to calculate VAT on goods and services.

How the Calculation Works

To add VAT, multiply the net amount by 1.20 (for 20%). To find the VAT in a gross amount, divide by 6 (for 20% VAT). The Flat Rate Scheme lets some small businesses pay a fixed percentage of gross turnover instead of tracking individual VAT.

Common Scenarios

A freelancer billing £1,000 plus VAT charges £1,200 total (adding £200 VAT). If they're on the Flat Rate Scheme at 14.5%, they'd pay £174 VAT to HMRC and keep £26 extra. VAT registration is compulsory once turnover exceeds £90,000.

Related Calculators

You might also find these useful: Self Employed, Cis, Ir35. Or use our main salary calculator for a complete take-home pay breakdown.