VAT Calculator

Free VAT Calculator: calculate vat instantly with transparent formula, worked examples and tips. No signup.

The VAT / Sales Tax Calculator instantly adds or removes Value Added Tax from any price, showing the net amount, gross amount, and the tax portion separately. It covers preset rates for the UK (20%), EU (21%), US (8%), Australia (10%), and Canada (5%), letting you switch regions in a single click. Whether you are a freelancer issuing invoices, a consumer checking a receipt, or an accountant reconciling quarterly returns, accurate VAT arithmetic is non-negotiable. Use Loan Payment Calculator to understand overall costs, or Mortgage Calculator to assess business profitability after tax.

HMRC's VAT registration threshold in 2024 is £90,000 annual turnover (raised from £85,000). Businesses above this threshold must charge VAT on goods and services, currently at the standard rate of 20%, with reduced rates of 5% on domestic energy and children's car seats. The EU VAT Directive 2006/112/EC harmonises VAT across member states while permitting local rate-setting — rates range from 17% in Luxembourg to 27% in Hungary. The United States has no federal VAT; instead, sales tax is levied at state and local level, meaning the effective rate varies by jurisdiction. Understanding the distinction between zero-rated (taxable at 0%, so input VAT is reclaimable) and exempt (outside the VAT system entirely) is critical for businesses with mixed supplies.

Choose Add VAT to compute gross from net, or Remove VAT to extract net from a VAT-inclusive price.
Enter the net or gross amount in the Amount field.
Select a preset rate (UK 20%, EU 21%, US 8%, AU 10%, CA 5%) or type a custom rate in the VAT/Tax rate field.
Read the three results: Net (excl. VAT), VAT amount, and Gross (incl. VAT).
Use the Effective tax % figure to verify your arithmetic — it should equal your chosen rate when adding VAT.

VAT calculation formulas explained

Adding VAT: Gross = Net × (1 + Rate ÷ 100). The gross (VAT-inclusive) price equals the net price multiplied by one plus the fractional rate. This is the price the consumer pays.

Removing VAT: Net = Gross ÷ (1 + Rate ÷ 100). To reverse-calculate from a VAT-inclusive price, divide by the VAT factor. The VAT amount is then Gross − Net.

Worked example: A UK contractor invoices £1,000 net at 20% VAT. Gross = £1,000 × 1.20 = £1,200. VAT = £200. For a consumer seeing a £120 restaurant bill (inclusive of 20% VAT), the pre-tax amount = £120 ÷ 1.20 = £100; VAT = £20. The effective rate check: £20 ÷ £100 = 20% ✓

Understanding your VAT results

Net, VAT amount, and gross

The net amount is what the supplier earns before remitting VAT to HMRC. The VAT amount is collected on behalf of the government and must be declared on your quarterly VAT return. The gross is the total the customer pays. If you are VAT-registered and purchase goods for business use, you can generally reclaim the input VAT, making the net cost the true cost to your business.

For the effective tax rate: when adding VAT, this will always equal your chosen rate. When removing VAT from a gross amount, the effective rate as a percentage of gross (not net) will be lower — for example, removing 20% VAT from £120 yields 16.67% of gross. This matters for financial reporting and tax reconciliation.

Finance tips and best practices

Always keep VAT invoices for at least 6 years — HMRC can investigate historical returns within this window.
Zero-rated exports (sending goods outside the UK) are still reported on your VAT return, but at 0% — different from exempt supplies which aren't reported at all.
Use the reverse VAT calculation when a supplier gives you a VAT-inclusive total and you need to know the net amount for your accounts.
For US sales tax: rates vary from 0% (Montana, Oregon) to over 10% in some combined state-city jurisdictions — always verify the local rate.
Flat-rate VAT scheme: UK businesses with turnover under £150,000 may pay a fixed percentage of gross turnover to HMRC, potentially reducing admin and improving cash flow.
If you run a business, consider registering for VAT voluntarily before the £90,000 threshold to reclaim input VAT on business purchases — especially useful for capital-intensive startups.

UK VAT registration threshold: £90,000 annual turnover (April 2024) — one of the highest thresholds in Europe. [HMRC]
EU standard VAT rates range from 17% (Luxembourg) to 27% (Hungary) across 27 member states. [European Commission, 2024]
UK VAT receipts in 2023–24: £168 billion — the second largest source of UK government revenue after income tax. [OBR]
Average US combined state and local sales tax rate: 7.12% as of 2024, with 45 states and Washington DC levying sales tax. [Tax Foundation]

Common mistakes to avoid

Applying VAT to exempt supplies (e.g., most financial services, residential rent, postage stamps in the UK) — these should have no VAT charged.
Calculating VAT as a percentage of the gross amount rather than the net — e.g., adding 20% of £120 gives £144, not £120 + 20% of the correct £100 net.
Missing partial exemption rules: if your business has both taxable and exempt income, you can only reclaim a proportion of input VAT, not all of it.
Forgetting to account for VAT on imports post-Brexit — goods imported into the UK now attract import VAT at the point of entry.

VAT rules are governed by HMRC (UK), the EU VAT Directive 2006/112/EC (EU), and equivalent national tax authorities worldwide. This calculator provides general information only and does not constitute financial, tax, or legal advice. Tax thresholds, rates, and rules change frequently — always verify current rates with HMRC or a qualified VAT adviser before issuing invoices or filing returns.