Add VAT to a net price, or strip it out of a gross one — at the UK standard rate of 20%, the reduced 5% rate, or 0%. For freelancers, trades and anyone sanity-checking an invoice.
Most goods and services carry VAT at the standard rate of 20%. A reduced rate of 5% applies to things like domestic fuel and power, energy-saving materials and some health products, while essentials such as most food, children's clothes, books and passenger transport are zero-rated (0%). A small class of services (insurance, finance, health, education) is exempt — different from zero-rated, mainly in that the seller can't reclaim VAT on their own costs.
To strip VAT out of a gross price at 20%, divide by 1.2 — the VAT inside a £120 price is £20, not £24 (a common mistake: 20% of the net £100). At 5%, divide by 1.05.
Businesses must register for VAT once taxable turnover passes £90,000 in any rolling 12 months, and can voluntarily register below that. This page is a calculator, not VAT advice — your accountant owns the edge cases.
Divide by 1.2 for the standard 20% rate: a £120 gross price is £100 net + £20 VAT. For the 5% reduced rate, divide by 1.05. Taking 20% off the gross price (£120 − £24 = £96) is wrong — VAT is calculated on the net amount.
At the standard 20% rate, £200 — so the gross price is £1,200. If £1,000 is the VAT-inclusive price, the VAT inside it is £166.67 and the net is £833.33.
20% standard rate for most goods and services, 5% reduced rate (e.g. domestic energy) and 0% on essentials like most food, children's clothing and books. The standard rate has been 20% since January 2011.
Once your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period, or you expect it to in the next 30 days. Registration below the threshold is voluntary and can let you reclaim VAT on business costs.