UK VAT rates
VAT is charged on taxable supplies of goods and services. GOV.UK lists three rates: the 20% standard rate, the 5% reduced rate and the 0% zero rate. Most goods and services use the standard rate, but the exact rate depends on what is supplied, how it is used and whether specific conditions are met.
| Rate | Typical treatment | Illustrative examples |
|---|---|---|
| 20% | Standard rate | Most goods and services |
| 5% | Reduced rate | Some home energy and children’s car seats |
| 0% | Zero rate | Most food, books and children’s clothes, subject to conditions |
The examples are not a classification service. HMRC's detailed guidance includes exceptions and conditions based on the customer, supplier, presentation, evidence and precise nature of the supply.
Adding VAT to a net amount
For a net amount and VAT rate r:
VAT = net × r | gross = net × (1 + r)
At 20%, a £100 net price has £20 VAT and a £120 gross price. At 5%, the same £100 net price has £5 VAT and a £105 gross price.
Removing VAT from a gross amount
A common mistake is to remove 20% by multiplying the gross price by 0.8. That is incorrect because the 20% was calculated from the smaller net amount. Divide by 1.2 instead:
net = gross ÷ (1 + r) | VAT = gross − net
For a £120 VAT-inclusive price at 20%, £120 ÷ 1.2 gives £100 net and the remaining £20 is VAT. Subtracting 20% would produce £96, which is not the original net amount.
Zero-rated, exempt and outside the scope
These terms are not interchangeable. A zero-rated supply is taxable at 0%; a VAT-registered business may still be able to reclaim related input tax. An exempt supply has no VAT charged and can restrict input-tax recovery. A transaction outside the scope is not part of the UK VAT system. Selecting 0% in this calculator makes all three look identical numerically, but it does not determine their accounting or legal treatment.
Rounding
Results are displayed to the nearest penny. Invoice systems may calculate VAT per line, per rate group or on the invoice total, so a multi-line invoice can differ by a few pence depending on the permitted rounding method. Use your accounting records consistently and follow HMRC guidance for invoices and VAT returns.
What this calculator does not decide
It does not determine whether a business must register, whether a supply is standard-rated, reduced, zero-rated, exempt or outside the scope, or how much input VAT can be reclaimed. It also does not model mixed rates, discounts, imports, exports, Northern Ireland/EU trade, partial exemption or the Flat Rate Scheme.
Official sources
Rates were checked againstGOV.UK VAT ratesand the detailed HMRC list ofVAT rates on different goods and services. The calculation runs locally in your browser and no amount is sent to us.