METHOD & GUIDANCE
How this calculation works
Keep tax-inclusive and tax-exclusive figures consistent, and use the rules and rate that apply to the relevant period and supply. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Choose the rate that applies to the supply and keep the net, tax and gross amounts distinct when pricing or checking an invoice.
Worked example
At the default 20% rate, 100 net produces 20 VAT and a 120 gross total before any quantity or discount change.
Common mistakes
- Assuming the standard rate applies to every supply.
- Applying a discount after tax when it is actually pre-tax.
- Using this planning result as a substitute for filing guidance.
Frequently asked questions
Is the vat calculator free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Does this calculator choose the correct VAT rate for me?
No. Enter the rate that applies to the supply. UK goods and services can be standard-rated, reduced-rated, zero-rated, exempt or outside the scope.
How do I remove 20% VAT from a gross price?
Divide the VAT-inclusive amount by 1.2 to find the net amount. Subtract net from gross to find the VAT element; do not simply subtract 20% of the gross amount.
Does zero-rated mean the same as exempt?
No. Both can produce no VAT charge to the customer, but their VAT treatment and input-tax consequences differ. Confirm the supply classification using HMRC guidance.
Continue the decision
- Profit Margin Calculator — See profit, margin and markup from one sale.
- Freelance Rate Calculator — Turn an income goal into a sustainable day rate.
Popular small-business decision paths
- Check when VAT registration may be required
- Plan how much VAT cash to reserve
- Build a Corporation Tax planning reserve
- Place the VAT payment in a cash-flow forecast
Get the free vat reserve checklist →
Optional email capture; this calculator remains free.
Official sources and checks
- HMRC: charging VAT — Current VAT rates and HMRC calculation examples.
Method reviewed 5 August 2026. Figures are illustrative and calculated locally in your browser. Official sources are linked where a rule or obligation affects how the result should be used. Read the Tool IQ calculation standard for our checking process, limitations and corrections policy.