What does this tool do?
A VAT-inclusive price is the net price plus VAT. Dividing the gross amount by 1 plus the VAT rate separates the two.
The Formula
Net = Gross ÷ (1 + VAT rate ÷ 100); VAT = Gross − NetFrequently Asked Questions
Why divide by 1.2 instead of subtracting 20%?
VAT is charged on the net price, so the gross is 120% of net. Dividing reverses that; subtracting 20% from gross would understate the net.
What is the VAT fraction?
For a 20% rate, VAT is one-sixth of the gross amount. The general fraction is rate ÷ (100 + rate).