How to Calculate VAT

VAT calculations are simple once you know whether the starting price excludes VAT or already includes VAT. The formula changes depending on whether you are adding VAT or removing VAT.

How to add VAT

When the price excludes VAT, multiply the net price by the VAT rate to find the VAT amount, then add it to the original price.

VAT amount = Net price × VAT rate
Gross price = Net price + VAT amount

Example: £100 ex VAT at 20% = £20 VAT, giving a total of £120.

How to remove VAT

When the price already includes VAT, divide the gross price by 1 plus the VAT rate.

Net price = Gross price ÷ 1.20
VAT amount = Gross price − Net price

Example: £120 including VAT at 20% = £100 ex VAT and £20 VAT.

Quick VAT examples

  • £50 + 20% VAT = £60 including VAT
  • £100 + 20% VAT = £120 including VAT
  • £250 + 20% VAT = £300 including VAT
  • £600 including VAT at 20% = £500 ex VAT

For instant results, use the online VAT calculator, or go straight to the reverse VAT calculator.