Using our free VAT calculator, you can add or subtract VAT from any value amount entered. The standard rate of VAT in the UK is currently 20%, so the calculator is set at that as default. However, the VAT rate may vary depending on the product or service bought/sold, and the country.
What are the different rates of VAT in the UK?
As of February 2022, there are 3 different rates of VAT that apply in the UK. Those being, 20%, 5% and 0% depending on the products or services bought and sold.
The current standard rate of VAT for the UK is 20%. The last time this was changed was back in 2011. As of March 2022, there have been no plans in the UK to change this rate.
For specific products and services such as home energy and children’s car seats, a 5% rate applies.
For a small set of products and services, there is a 0% rate. This applies to things such as kids clothing and physical books.
For hospitality, holiday accommodation and attractions there was a temporary 12.5% VAT rate to aid the industry during covid. This lowered rate was removed on 31 March 2022 when the standard UK rate of VAT then applied.
Note: VAT rates outside the UK can vary. For a list of VAT rates in other countries please click here.
How Is VAT Calculated?
If you want to add VAT to a figure, you first need to divide the original amount by 100 and then multiply by 100 plus the VAT percentage.
An example of adding VAT of 20%:
- We will start with a figure of £200.
- £200 divided by 100 is £2.
- We then take the £2, and multiple that by 100 and the 20% VAT for a total of 120.
- 2 x 120 is 240.
With the above adding 20% VAT to the original figure of £200, brings it to a grand total of £240.
If you want to remove the VAT from a figure, you need to take the original figure and divide that by 100 and the VAT percentage combined. (So for a UK VAT of 20%, it would be 120). You then multiply the result by 100.
An example of removing VAT of 20%:
- We still start with a figure of £200
- We divided that amount by 120 and then multiply the result by 100.
- £200 divided by 120 and then multiplied by 100 equals £166.62.
With the above, removing 20% VAT from the original figure of £200 leaves us with the figure of £166.62
Most Frequently Asked Questions
There may be times where you need to check the validity of a VAT number. For UK registered businesses, HMRC provide a VAT Number Checker. That service applies to UK VAT numbers only. If the VAT number is one in a EU country, there’s a VIES VAT number validation service.
As of September 2020, VAT registration is compulsory as soon as your turnover hits a £85,000 threshold. An important caveat to this is that you also have to register for VAT, if you expect to hit that threshold in the next 30-day period.
We always recommend contacting an accountant for any questions you may have regarding VAT. There can be hefty fines and penalties from HMRC if VAT isn’t handled or setup correctly, so it’s important that a qualified accountant assists you.
For the 2019 to 2020 financial year, the UK government generated 129.88 billion GBP. That’s correct, nearly 130 billion pounds in one financial year alone.