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VAT calculator: add or remove VAT
Add VAT to a price or work out the VAT inside a total. The rate is 20% by default; change it for the 5% reduced rate.
To add 20% VAT, multiply the price by 1.2. To take VAT out of a price that includes it, divide by 1.2: £120 including VAT is £100 plus £20 VAT. The reduced rate is 5%, and some goods and services are zero-rated or exempt.
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Start freeHow it works
Add VAT: price × 1.2 · Remove VAT: total ÷ 1.2
Adding and removing VAT are not the same sum. VAT is 20% of the price before VAT, which is one sixth of the total after VAT, not 20% of it.
Worked example
A £500 job plus VAT is £600 (£100 VAT). A £600 total including VAT is £500 before VAT, with £100 VAT to pass to HMRC. Taking 20% off £600 would give £480, which is wrong.
Rates
The standard rate is 20%. Some work is 5% or 0%, such as certain energy-saving installations and some new-build work. Check VAT rates on different goods and services before you change the rate. Working under CIS? The CIS calculator works out the deduction, which is on labour only.
Questions
When must I register for VAT?
When your VAT-taxable turnover goes over the threshold in any rolling 12 months. Check the current VAT registration threshold on GOV.UK. You can also register voluntarily.
Do I charge VAT on labour and materials?
Yes, once you're registered: VAT applies to the whole invoice unless the work has a reduced or zero rate.
What is the domestic reverse charge?
For most construction work between VAT-registered businesses under CIS, the customer accounts for the VAT instead of you. Your invoice shows the VAT but says reverse charge applies.
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