How to Add VAT to a Price
To add VAT to a net (ex-VAT) amount:
Formula (20% VAT)
Gross = Net Amount × 1.20
Example: Adding VAT
- Net price: £100
- VAT (20%): £100 × 0.20 = £20
- Gross price: £100 + £20 = £120
Free Tool for UK Trades
UK VAT Calculator2025/26 Tax Year
Add VAT to prices or extract VAT from gross amounts. Works with all UK VAT rates including Domestic Reverse Charge for construction.
✓
Standard 20% rate✓
Reverse Charge support✓
Instant resultsUK VAT Calculator
Standard rate
£
Domestic Reverse Charge?
For construction services to VAT-registered businesses
Calculation Result
Net Amount (ex VAT)£1000.00
VAT (20%)+ £200.00
Gross Amount (inc VAT)£1200.00
£1200.00
Quick Maths
Add 20% VAT:× 1.2
Remove 20% VAT:÷ 1.2
Add 5% VAT:× 1.05
Remove 5% VAT:÷ 1.05
Automate your VAT
Graftly calculates VAT automatically on every invoice, handles Reverse Charge, and exports MTD-ready reports.
Start Free TrialWorks offline. Built for UK trades.
UK VAT Rates
VAT Rates Explained
20%
Standard Rate
Most goods and services. This is the rate you'll use for most trade work.
5%
Reduced Rate
Home energy, children's car seats, some energy-saving materials.
0%
Zero Rate
Food, children's clothing, books, newspapers, new build housing.
How to Remove VAT from a Price
To extract VAT from a gross (VAT-inclusive) amount, you divide by 1.20 (for 20% VAT):
Formula (20% VAT)
Net = Gross Amount ÷ 1.20
VAT = Gross - Net
Example: Removing VAT
- Gross price: £120
- Net price: £120 ÷ 1.20 = £100
- VAT amount: £120 - £100 = £20
Common VAT Mistake
Don't just subtract 20% from a gross price! £120 minus 20% = £96, which is wrong. You must divide by 1.20 to get the correct net amount of £100.
VAT Domestic Reverse Charge
The Domestic Reverse Charge applies to construction services supplied between VAT-registered businesses in the UK. It was introduced in March 2021 to combat VAT fraud.
When Does Reverse Charge Apply?
- You're supplying construction services (not just materials)
- Your customer is VAT-registered
- Your customer is not an end user (they're passing it on)
- The payment is reported under CIS
Reverse Charge Wording
Your invoice must include this statement:
"Reverse Charge: Customer to account for VAT to HMRC"
Making Tax Digital for VAT
All VAT-registered businesses must use Making Tax Digital (MTD) compatible software to keep digital VAT records and submit VAT returns directly to HMRC.
VAT returns are due quarterly, and the deadline is usually one calendar month and 7 days after the end of your VAT period.
VAT Registration Threshold
You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month period (threshold from April 2024), or you expect to exceed it in the next 30 days.
MTD-Ready Invoicing
Graftly calculates VAT automatically on every invoice and generates MTD-compatible exports for your accountant. Reverse Charge? We handle that too.
Try Graftly Free→