This free tool enables you to calculate VAT to add or subtract from a price.
Wat are the VAT rates in the UK?
Since January 4 th 2011 the standard VAT rate has been 20%. In addition there is a reduced rate of 5% and a zero rate of 0%. The reduced rate of 5% applies to some services and goods such as home energy or children's car seats. The zero rate applies to some goods and services such as children's clothes and most food. Some things don't even have a zero rate but are simply exempt from VAT: for example property and financial transactions and stamps.
How to calculate VAT
The Value Added Tax (VAT) is calculated directly on the sale price of the product / service concerned. As an entrepreneur, you must therefore know the valid VAT rate for your activity and mention on your invoice:
- the net sale price with VAT excluded
- the rate of VAT applied
- the amount of VAT that this represents
- the total sale price with all taxes included (VAT included)
Calculation of VAT from the net price
The calculation of the VAT amount based on the price excluding VAT is calculated as follows:
standard rate: (net price exclusive of VAT / 100) x 120 = total price with VAT
reduced rate: (net price exclusive of VAT / 100) x 105 = total price with VAT
Calculation of VAT from the total price
The calculation of the amount of VAT based on the all inclusive price is as follows:
standard rate: total price inclusive of VAT / 1,2 = net price without VAT
reduced rate: total price inclusive of VAT / 1,05 = net price without VAT