UK VAT inclusive or exclusive.
Total with VAT
—
Pre-VAT (net)
—
VAT
—
Your breakdown
Updates live as you type| Item | Amount |
|---|
Worked example
Take a net price of £100 at the 20 percent standard rate in add-VAT mode, the usual case when a business quotes a price before tax. VAT is £100 times 20 percent, which is £20, so the total the customer pays is £120. Working the other way, if £120 is already VAT-inclusive, you divide by 1.20 to recover the £100 net, and the £20 difference is the VAT element. The key point is that the 20 percent is always applied to the net figure, not the gross, so to extract VAT you divide rather than multiply.
How it is calculated
VAT is a percentage added to the net value of goods or services, charged at 20 percent standard, 5 percent reduced, or 0 percent zero rates depending on the item. In add-VAT mode the calculator multiplies the net amount by the rate and adds it on to get the gross. In extract mode it assumes the figure already includes VAT, so it divides by one plus the rate to recover the net, and the remainder is the VAT element. At 20 percent the VAT inside a gross price is always one sixth of that total, a useful mental shortcut. Businesses with VAT-taxable turnover above £90,000 in any rolling twelve months must register and charge VAT, though voluntary registration is allowed below that and can help when customers are themselves VAT-registered.