VAT Calculator

How to use this calculator#

1. 1
   Pick the country rate or type your ownThe presets cover the common standard rates. Use a custom rate for reduced bands — 5% on UK domestic fuel, 13.5% or 9% in Ireland, 7% in Germany — because applying the standard rate to a reduced-rate supply is a filing error, not a rounding one.
2. 2
   Decide whether your figure is net or grossNet is the price before VAT, which is how business-to-business quotes are given. Gross is what a consumer pays and what appears on a till receipt. Getting these the wrong way round is the single biggest source of invoice disputes.
3. 3
   Use Add for quoting, Remove for reconcilingAdd VAT when you are pricing work for a customer. Remove VAT when you have a receipt total and need the input tax to reclaim, or the net figure for your profit and loss account.
4. 4
   Round at the invoice line, not at the endTax authorities expect VAT to be calculated per line and rounded to the nearest minor unit. Computing on the invoice total and back-solving the lines produces penny discrepancies that accounting software will flag.

The formula#

Net, VAT and gross#

To add VAT, multiply the net price by 1 plus the rate: 200 at the UK standard 20% becomes 240. To remove it, divide the gross by that same factor — 240 divided by 1.2 returns 200 net and 40 of VAT. At 20% specifically there is a useful shortcut worth memorising: the VAT contained in any gross figure is exactly one sixth of it.

Different rates need different divisors: 1.23 for Ireland, 1.19 for Germany, 1.20 for France and the UK, 1.21 for Spain and the Netherlands, 1.22 for Italy. Applying the percentage to the gross figure rather than dividing is the single most common error on hand-written invoices, and it always understates the net price.

Standard, reduced and zero rates#

Almost every VAT country operates several bands. The UK charges 20% standard, 5% on domestic fuel and child car seats, and 0% on most food, books and children's clothing. Ireland runs 23% alongside 13.5% and 9% reduced bands. Zero-rated is not the same as exempt: a zero-rated business still reclaims the VAT on its purchases, while an exempt one cannot.

Registration and reclaiming input VAT#

Businesses above the registration threshold — 90,000 of taxable turnover in the UK, with wide variation across the EU — must charge VAT and file periodic returns. They then reclaim the VAT paid on their own purchases, so the tax ultimately falls on the final consumer rather than accumulating through the supply chain. Keep valid VAT invoices, because without them an input claim can be refused on audit.

Worked examples#

Reference tables#

Common mistakes#

• Subtracting the rate to remove VATTaking 20% off a £240 gross gives £192, not £200. The error is 4% of the net price at a 20% rate and grows with the rate — at 27% it is over 7%. Always divide by (1 + rate).
• Treating zero-rated and exempt as interchangeableBoth charge the customer nothing, but only zero-rated supplies let you recover input VAT. A business that misclassifies exempt supplies as zero-rated reclaims tax it is not entitled to, and repays it with interest on discovery.
• Applying VAT before the discountVAT is charged on the amount actually payable. A 10% trade discount on a £1,000 net order means VAT on £900 — £180, not £200. Prompt-payment discount rules differ by country, so check whether the credit is issued net or gross of VAT.
• Ignoring the registration threshold until it is passedThe UK threshold is £90,000 of taxable turnover on a rolling twelve-month basis, and thresholds vary widely across the EU. Cross it and you owe VAT on sales from the registration date whether or not you charged it — a retrospective 16.67% cut to your revenue.

Frequently asked questions#

Key terms#

Net price

The price excluding VAT. The figure a business quotes to another business and books as revenue.

Gross price

The price including VAT. Consumer-facing prices must be shown gross in the UK and across the EU.

Input VAT

VAT you paid on purchases. A registered business reclaims it, which is why VAT ultimately falls on the final consumer rather than accumulating through the supply chain.

Output VAT

VAT you charged on sales. You remit output VAT less input VAT to the tax authority each period.

Zero-rated

Taxable at 0%. The supply is inside the VAT system, so input VAT on related purchases remains fully recoverable.

Reverse charge

A mechanism where the customer accounts for the VAT instead of the supplier, used for many cross-border B2B services and, in the UK, for construction services.

Sources#