How do I calculate VAT on a price?
Multiply the net (excluding VAT) price by the VAT rate divided by 100. For UK standard rate (20%), a £100 net price has VAT of £20, giving a gross price of £120. Use the formula: gross = net × (1 + rate/100).
How do I remove VAT from a gross price?
Divide the gross price by (1 + rate/100). For a £120 price including 20% VAT: £120 / 1.20 = £100 net. The VAT element is £120 - £100 = £20. This reverse calculation is useful for reclaiming input VAT on business purchases.
What are the different VAT rates in the UK?
The UK has three rates: standard rate (20%) for most goods and services, reduced rate (5%) for items like domestic fuel and some energy-saving products, and zero rate (0%) for most food, books, children's clothing, and public transport. Some items are VAT-exempt.
Is VAT the same as GST or sales tax?
Not exactly. VAT and GST are both consumption taxes and use similar percentage-based maths, which is why the same calculator can handle either rate. Sales tax is usually applied differently at the point of sale and can vary by state or locality, but the gross, net, and tax amount formulas are still the same once you know the rate.
What is the VAT-inclusive formula for removing tax?
When you know the gross (tax-inclusive) amount and want to find the net: Net = Gross ÷ (1 + rate/100). For example, to remove 20% VAT from £120: £120 ÷ 1.20 = £100 net, with £20 being the VAT. A common mistake is to simply subtract 20% of the gross (£120 × 0.20 = £24), which gives the wrong answer because the 20% was applied to the net, not the gross.
Can I use a VAT calculator for GST and sales-tax-style maths?
Yes for the arithmetic, no for the legal tax rules. A VAT calculator and a GST calculator use the same percentage relationships for net, tax, and gross amounts once you know the right rate. It is still your job to confirm whether VAT, GST, HST, PST, or sales tax applies, and whether reduced rates, exemptions, or product-specific rules change the amount.
How do I add 20% VAT to a price?
Multiply the VAT-exclusive price by 1.20. For example, a net price of 100 becomes 120 gross, and the VAT amount is 20. This is the standard add-VAT workflow for quotes, invoices, and price checks when the starting figure is before tax.
Why can’t I just subtract 20% from a VAT-inclusive total?
Because the 20% VAT rate was applied to the net amount, not the gross total. If a total is 120 including 20% VAT, subtracting 20% of 120 gives 24, which is wrong. The correct method is to divide 120 by 1.20 to get the 100 net amount, then subtract to find the 20 VAT amount.
How much is VAT?
There is no single global VAT rate. The UK standard rate is 20%, EU member states must keep a standard rate of at least 15% but many charge more, Australia uses a 10% GST, New Zealand uses a 15% GST, and Canada uses a 5% federal GST with higher HST rates in some provinces. Product type, exemptions, and reduced-rate rules can also change the answer.
Do I calculate VAT before or after a discount?
Usually the discount changes the taxable base first, and VAT is then calculated on the discounted amount rather than the original sticker price. That is why invoice discounts, promotional discounts, and negotiated reductions should normally be applied before you work out the VAT line. If shipping or separate fees are involved, calculate each line using the actual tax treatment that applies to it.
Is zero-rated the same as VAT-exempt?
No. A zero-rated supply is still a taxable supply but taxed at 0%, while an exempt supply is outside the standard taxable treatment for that transaction. The arithmetic on a zero-rated line is simple because the tax amount is 0, but the compliance and input-tax consequences can differ from exempt supplies, so the distinction matters.
How do I check GST on a Canadian invoice?
Start by checking whether the price shown is before GST/HST or already tax-inclusive, then apply the province-specific GST/HST rate that actually applies to the supply. If the invoice is for taxable goods or services of 100 Canadian dollars or more, the supplier should include their GST/HST account number on the invoice or other business paper. The calculator can verify the arithmetic, but CRA guidance should be used to confirm the right rate and invoice details.
Can I use one VAT calculator for mixed-rate invoices or reverse-charge transactions?
Not as a single one-line calculation. A single-rate VAT calculator is best for one taxable base and one rate at a time. Mixed-rate invoices should be split line by line, and reverse-charge or special-scheme transactions need the relevant jurisdiction rules because the right treatment is a legal question, not just a maths question.
Can I calculate net and gross if I only know the VAT amount?
Yes, but only if you also know the VAT rate. Divide the VAT amount by the rate as a decimal to recover the net amount, then add the VAT amount back to find the gross total. For example, a VAT amount of 20 at 20% implies a 100 net amount and a 120 gross total. A VAT amount of 20 at 5% would imply a 400 net amount and a 420 gross total, which shows why the rate still matters.
Why does a 20% VAT rate mean only 16.67% of the gross total is tax?
Because the 20% rate is charged on the net amount before tax, not on the final gross total after tax. If the net amount is 100 and VAT is 20, the gross total is 120. The tax share of gross is therefore 20 divided by 120, which is 16.67%. That is why the VAT share inside a gross total is always smaller than the headline VAT rate.
What if the invoice shows a VAT amount but not the subtotal?
Use the VAT amount workflow with the stated rate. The calculator can reconstruct the pre-tax subtotal and the implied gross total from the VAT line alone. This is useful for supplier screenshots, partially visible receipts, and bookkeeping checks, but it still assumes the shown VAT rate is correct for the transaction.