VAT Calculator

Calculator

Disclaimer: The results provided by this calculator are for general guidance only and are based on simplified assumptions. They do not constitute financial, tax, or accounting advice. Tax rules change regularly, and individual circumstances can affect the accuracy of any calculation. Leitch Accountancy Services accepts no liability for any loss arising from reliance on the figures shown. For personalised advice, please contact us directly.

How VAT Works

Value Added Tax (VAT) is a percentage-based tax charged on most goods and services in the UK. When a business sells a VAT-able product or service, it must add VAT to the price it charges to customers and later pay this amount to HMRC. VAT-registered businesses can also reclaim VAT paid on eligible purchases, meaning they only pay the net difference between VAT charged and VAT reclaimed.

Using a VAT Calculator

A VAT calculator helps you quickly work out two things: the amount of VAT to add to a net price, and the VAT contained within a gross (VAT-inclusive) price. The standard VAT rate in the UK is 20%, but some items are charged at 5% or 0% depending on the type of goods or services. This tool provides a fast estimate for business owners, clients, or anyone needing to understand how VAT affects the final price.

Example

Example: Adding VAT to a Net Price
A graphic designer charges £250 for a project. If VAT is applied at the standard rate of 20%:

  • VAT = £250 × 20% = £50
  • Total including VAT = £250 + £50 = £300

Example: Removing VAT from a VAT-Inclusive Price
A contractor charges £600 including VAT at 20%. To calculate the net amount:

  • Net amount = £600 ÷ 1.20 = £500
  • VAT amount = £600 − £500 = £100
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