VAT Calculator 2026/27
Adding 20% VAT to £1,000 gives £200 VAT and a £1,200 total. To remove VAT from £1,200, divide by 1.20 for a £1,000 pre-VAT price. For 5% VAT, multiply by 1.05 to add or divide by 1.05 to remove. The UK VAT registration threshold for 2026/27 is £90,000.
Figures verified against HMRC Income Tax rates on .
Written by James HartleyCIMA
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How this is calculated:
£1,000.00 × 20.0% = £200.00 VAT → Total = £1,200.00
VAT Registration Threshold
UK businesses must register for VAT when taxable turnover exceeds £90,000 in any rolling 12-month period (2026/27).
Quick VAT Reference (20% added)
| Net Amount | VAT Amount | Gross Total |
|---|---|---|
| £100.00 | £20.00 | £120.00 |
| £250.00 | £50.00 | £300.00 |
| £500.00 | £100.00 | £600.00 |
| £1,000.00 | £200.00 | £1,200.00 |
| £2,500.00 | £500.00 | £3,000.00 |
| £5,000.00 | £1,000.00 | £6,000.00 |
Small businesses with turnover under £150,000 can use the VAT Flat Rate Scheme. You charge 20% but pay HMRC a lower percentage, keeping the difference as profit.
These insights are generated based on your inputs and general UK financial guidelines. They do not constitute personal financial advice. Always consult a CIMA-qualified accountant or FCA-regulated adviser before making financial decisions.
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How VAT Calculator 2026/27 Works
Adding VAT to a Net Amount - Step-by-Step
When you need to add VAT to a net (ex-VAT) price, the formula is: Gross = Net × (1 + VAT rate). At 20%, multiply by 1.20. At 5%, multiply by 1.05. The VAT element alone is VAT = Net × rate.
Worked example - Adding 20% VAT: You invoice a client £850 net for consulting services. VAT = £850 × 20% = £170. Gross invoice total = £850 + £170 = £1,020. You charge the client £1,020, collect £170 of output VAT, and pay that £170 to HMRC on your next VAT return (offset by any input VAT reclaimed on your business purchases).
Removing VAT: Reverse Calculation - Step-by-Step
To extract the VAT from a gross (VAT-inclusive) price, divide by (1 + rate) - not multiply. At 20%: Net = Gross ÷ 1.20. At 5%: Net = Gross ÷ 1.05.
Common mistake: Multiplying the gross by 20% gives the wrong answer. £1,200 × 20% = £240 (incorrect - this would imply a net of £960, not £1,000). Correct method: £1,200 ÷ 1.20 = £1,000 net; VAT = £1,200 − £1,000 = £200.
Worked example - Removing 5% VAT: You receive a domestic energy bill for £315 inclusive of 5% reduced-rate VAT. Net = £315 ÷ 1.05 = £300. VAT element = £315 − £300 = £15.
UK VAT Rates 2026/27
| Rate | Percentage | Common Examples |
|---|---|---|
| Standard Rate | 20% | Most goods and services, alcohol, clothing (adult), electronics |
| Reduced Rate | 5% | Domestic fuel & power, children's car seats, energy-saving materials, residential conversions |
| Zero Rate | 0% | Most food, children's clothing, books, newspapers, passenger transport |
| Exempt | N/A | Financial services, insurance, education, healthcare (no VAT charged or reclaimed) |
Source: HMRC VAT rates (gov.uk/vat-rates) - verified April 2026
The standard rate is 20% and applies to most goods and services. The reduced rate is 5% applies to domestic fuel and power, children's car seats, energy-saving materials, and certain residential conversions. The zero rate (0%) applies to most food, children's clothing, books, newspapers, and passenger transport. Zero-rated differs from VAT-exempt: VAT-registered businesses can reclaim input VAT on zero-rated supplies but not on exempt ones. If you make exempt supplies (e.g. financial services, insurance, some property lettings), your input VAT recovery is restricted.
VAT Registration: When You Must Register
You must register for VAT when your taxable turnover exceeds £90,000 in any rolling 12-month period (2026/27 threshold, confirmed by HMRC). Monitor your turnover every month - the test is rolling, not annual. Once registered, you charge VAT on sales and file quarterly VAT returns via Making Tax Digital (MTD) compatible software. Voluntary registration below £90,000 is available and beneficial if you have significant VAT-able purchases to reclaim as input tax.
Custom Rate
For rates other than 20% or 5% - such as international transactions, historical UK rates (the standard rate was 17.5% before January 2011), or EU/cross-border calculations - select "Custom Rate" and enter any percentage. The same add/remove formulas apply at any rate.
Frequently Asked Questions
To add 20% VAT to a net (ex-VAT) price, multiply by 1.20. For example, £500 x 1.20 = £600 inclusive of VAT. The VAT element is £100. For 5% VAT, multiply by 1.05. You can also use this calculator - enter the net amount, select 'Add VAT', and choose your rate.
To reverse-calculate VAT from a gross (VAT-inclusive) price, divide by 1.20 for standard rate (or 1.05 for reduced rate). For example, £1,200 ÷ 1.20 = £1,000 net. The VAT element is £200. You cannot simply multiply by 20% - that gives the wrong answer. Always divide by (1 + rate).
There are three UK VAT rates in 2025: Standard rate 20% (applies to most goods and services); Reduced rate 5% (applies to children's car seats, domestic fuel and power, energy-saving materials, residential conversions, and some other items); Zero rate 0% (applies to most food, children's clothing, books, newspapers, and passenger transport). Some items are exempt from VAT entirely.
You must register for VAT when your taxable turnover exceeds £90,000 in any rolling 12-month period (2026/27 threshold). You should monitor your turnover every month - not just at year end - because the test is rolling. You can also register voluntarily below the threshold, which can be beneficial if you have significant VAT-able purchases and want to reclaim input VAT.
The VAT Flat Rate Scheme (FRS) allows small businesses (turnover under £150,000 ex-VAT) to pay a fixed percentage of their gross (VAT-inclusive) turnover to HMRC, rather than calculating VAT on every transaction. The flat rate percentage varies by trade sector (e.g. 12.5% for accountancy, 9% for retail). You still charge customers 20% VAT but pay a lower flat rate to HMRC - the difference is profit. However, you can't reclaim input VAT on purchases (except for certain capital items over £2,000).
Yes. Since January 2021 (post-Brexit), non-UK businesses supplying digital services to UK consumers must register for UK VAT when their supplies exceed the £90,000 threshold. Digital services include streaming, software, e-books, and online courses. UK businesses charging UK consumers for digital services charge VAT at the standard 20% rate. B2B supplies follow the reverse charge mechanism.
From 1 April 2026, qualifying donations of goods by businesses to charities are exempt from VAT. This removes a previous barrier where businesses had to account for VAT on donated goods, discouraging charitable giving. The standard rate of 20%, reduced rate of 5%, and VAT registration threshold of £90,000 are all unchanged for 2026/27.
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Official Rates Used
This calculator uses official HMRC rates for 2026/27. View the current rates at GOV.UK:
Rates last verified:
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.