VAT Calculator

VAT (Value Added Tax) is a consumption tax applied to goods and services at each stage of production and distribution, based on the value added at that stage. Unlike US sales tax, which is only charged once at the final point of sale, VAT is common throughout the UK, the European Union, and over 170 other countries worldwide. The end consumer ultimately bears the cost, since it's included in the final shelf price.

To add VAT to a net (pre-VAT) price, multiply the net price by the VAT rate as a decimal, then add that amount to the net price. For example, with a net price of £100 and a 20% VAT rate: VAT amount = £100 × 0.20 = £20, so the gross price = £100 + £20 = £120. Our calculator's 'Add VAT' mode does this instantly — just enter the net price and rate.

To remove VAT from a gross (VAT-inclusive) price, divide the gross price by 1 plus the VAT rate as a decimal. For example, with a gross price of £120 and a 20% VAT rate: net price = £120 ÷ 1.20 = £100, and the VAT amount = £120 − £100 = £20. This is often called 'reverse VAT' or 'backward VAT' calculation, and it's the mode to use when you have a receipt or shelf price that already includes VAT.

The standard VAT rate in the UK is 20%, applying to most goods and services. A reduced rate of 5% applies to certain items such as home energy and children's car seats, and a 0% rate applies to essentials like most food, books, and children's clothing. Always check current HMRC guidance, as rates and exemptions can change.

VAT is collected incrementally at every stage of the supply chain, with businesses reclaiming the VAT they paid on their own purchases (input VAT) and remitting the difference to the tax authority. US sales tax, by contrast, is collected only once, at the final retail sale to the consumer. Despite this structural difference, the final amount paid by the end consumer is conceptually similar to a sales tax added to the price.

No. VAT rates vary significantly by country — for example, the UK standard rate is 20%, Germany's is 19%, and Spain and the Netherlands both use 21%. Many countries also apply reduced rates for specific categories like food, books, medicine, or hospitality. Always confirm the correct rate for your country and product category before relying on a calculation for official purposes.

Yes. The calculator works with any percentage rate, so you can use it for VAT in the UK or EU, GST in countries like Australia, New Zealand, or Canada, or any similar consumption tax — just enter the correct rate for your country using the input field or one of the quick-select presets.