What is the standard UK VAT rate?

The standard UK VAT rate is 20%. A reduced rate of 5% applies to items like domestic energy and children's car seats. A zero rate (0%) applies to food, children's clothing, and books.

How do I calculate VAT?

To add VAT: multiply the net price by (1 + VAT rate). To remove VAT from a gross price: divide by (1 + VAT rate). For example, to remove 20% VAT from £120: £120 ÷ 1.20 = £100 net.

What is the formula to remove VAT?

Net price = Gross price ÷ (1 + VAT rate). For 20% VAT: net = gross ÷ 1.20. For 5% VAT: net = gross ÷ 1.05.

What items are VAT exempt in the UK?

Zero-rated items include most food, children's clothing, books, newspapers, and public transport. Exempt items (no VAT at all) include insurance, financial services, education, and healthcare.

VAT Calculator

Add or remove VAT in seconds. UK rates included.

VAT Rate

Custom rate: %

Net Price (ex-VAT)

VAT / GST Rates Around the World

🇬🇧 UK — 20% standard, 5% reduced

🇩🇪 Germany — 19% standard, 7% reduced

🇫🇷 France — 20% standard, 10% / 5.5% reduced

🇮🇪 Ireland — 23% standard, 13.5% / 9% reduced

🇳🇱 Netherlands — 21% standard, 9% reduced

🇪🇸 Spain — 21% standard, 10% / 4% reduced

🇮🇹 Italy — 22% standard, 10% / 5% / 4% reduced

🇦🇺 Australia — 10% GST

🇨🇦 Canada — 5% federal GST (+ provincial)

🇳🇿 New Zealand — 15% GST

🇸🇬 Singapore — 9% GST

🇿🇦 South Africa — 15% VAT

🇮🇳 India — 5% / 12% / 18% / 28% GST

🇺🇸 USA — No federal sales tax (state rates vary)

Quick Reference

Rate	Divide by
20%	1.20
5%	1.05
15%	1.15
10%	1.10
23%	1.23

To remove VAT, divide gross by the divisor above.

Quick Answer: To add 20% VAT, multiply the net price by 1.20. To remove 20% VAT from a gross price, divide by 1.20. Example: £100 + 20% VAT = £120. Or: £120 gross ÷ 1.20 = £100 net, with £20 VAT.

How VAT Works

Value Added Tax (VAT) is a consumption tax applied at each stage of the supply chain. In the UK, businesses registered for VAT must charge it on taxable sales and can reclaim VAT paid on business purchases.

UK VAT Rates (2025/26)

The UK has three VAT rates. The standard rate of 20% applies to most goods and services. The reduced rate of 5% covers domestic energy, children's car seats, and certain renovation work. The zero rate (0%) applies to most food, children's clothing, books, newspapers, and public transport — zero-rated goods are still VAT-taxable but at 0%, so businesses can still reclaim input VAT on related costs.

Exempt vs Zero-Rated

Zero-rated and VAT-exempt are different. Zero-rated items are taxable at 0% — businesses can reclaim input VAT. Exempt items (insurance, financial services, education, healthcare) are outside the VAT system entirely — businesses cannot reclaim input VAT on costs related to exempt supplies.

VAT Registration Threshold

UK businesses must register for VAT when their taxable turnover exceeds £90,000 in a rolling 12-month period (2025/26 threshold). Voluntary registration is possible below this threshold. The VAT registration number is 9 digits and must appear on all VAT invoices.

Frequently Asked Questions

How do I add VAT to a price?

Multiply the net (ex-VAT) price by (1 + VAT rate). For 20%: net × 1.20. For 5%: net × 1.05. So a £50 item at 20% VAT becomes £60 gross.

How do I remove VAT from a price?

Divide the gross (VAT-inclusive) price by (1 + VAT rate). For 20%: gross ÷ 1.20. For 5%: gross ÷ 1.05. So £120 including 20% VAT has a net price of £100 and VAT of £20.

What is the current UK VAT threshold for 2025?

The VAT registration threshold in the UK for 2025/26 is £90,000 of taxable turnover in a rolling 12-month period.

Is VAT the same as sales tax?

They are similar but different. VAT is collected at every stage of production, with businesses reclaiming VAT paid to suppliers. US sales tax is only charged at the final point of sale to the consumer.