How to calculate VAT
Choose the amount basis and enter the rate.
1
Set the amount
Enter the net figure if adding VAT, or the gross figure if extracting it.
2
Add the rate
Use the standard or reduced rate that applies to the supply.
3
Check both sides
Confirm net, VAT and gross reconcile on the invoice.
What does this tool do?
VAT is charged on the value added at each stage of supply. Businesses usually quote prices net of VAT, but consumer prices are often shown inclusive, so calculating in both directions is essential for invoices and pricing.
The Formula
Net: VAT = Net × Rate; Gross: VAT = Gross − Gross ÷ (1 + Rate)Frequently Asked Questions
How do I extract VAT from a gross price?
Divide the gross amount by one plus the VAT rate. At 20%, a gross price of 120 has a net value of 100 and VAT of 20.
Can a business reclaim VAT?
Usually a VAT-registered business can reclaim VAT on eligible business purchases. Rules and restrictions vary, so keep valid invoices and confirm local requirements.