How to Calculate VAT: Formula and Examples (UK 20%)

Learn how to calculate VAT on a price with one simple formula. UK 20%, 5% and 0% examples, a quick table and the mistakes to avoid.

October 21, 2026 · 2 min read

VAT Calculations

VAT formula: net price times 1.20 gives the gross price, example £80 plus £16 VAT equals £96

VAT is a tax added to the price of most goods and services. To calculate it, you multiply the price before VAT (the net price) by the VAT rate.

The UK standard rate is 20%, with a reduced rate of 5% and a zero rate for some items. Rates can change, so confirm the current ones on GOV.UK.

VAT = net price × VAT rate

Gross price = net price × (1 + VAT rate)

Example: £80 net plus 20% VAT of £16 gives £96 gross

How do you calculate VAT in 3 steps?

A freelancer charges £80 before VAT. At the 20% rate:

Turn the rate into a decimal: 20% = 0.20
Multiply the net price by it: 80 × 0.20 = £16 VAT
Add it to the net price: 80 + 16 = £96

You can also do it in one step: 80 × 1.20 = £96.

Want to try it right away? VAT Calculator is free and needs no signup.

What is VAT at 20%, 5% and 0%?

Rate	VAT on £100 net	Gross price	Multiplier
20% (standard)	£20.00	£120.00	× 1.20
5% (reduced)	£5.00	£105.00	× 1.05
0% (zero)	£0.00	£100.00	× 1.00

How do you calculate VAT on several items?

Add the net prices first, then work out VAT once on the total. This avoids rounding differences.

Items: £19.99 + £34.50 + £12.75 = £67.24 net
VAT at 20%: 67.24 × 0.20 = 13.448, rounded to £13.45
Total: £80.69

Three steps to calculate VAT: convert the rate, multiply, add to the net price

What mistakes should you avoid?

Using the gross price as the starting point. VAT is calculated on the net price.
Subtracting 20% to remove VAT. To go backwards you must divide, see how to calculate VAT backwards.
Mixing up the rate. Check whether an item is standard, reduced or zero rated.

Use the VAT calculator

A calculator saves time when you have many prices. Enter the net amount and the rate, and see the VAT and the total at once. For a full walkthrough of adding and removing VAT, read how to add or remove VAT.

FAQ

How do I calculate 20% VAT on a price?

Multiply the net price by 0.20 to get the VAT, or by 1.20 to get the price including VAT.

What is the VAT on £100?

At 20% the VAT is £20, so the total is £120. At 5% the VAT is £5.

Is VAT calculated on the net or the gross price?

On the net price, which is the price before VAT is added.

Is this tax advice?

No. It explains the calculation. For your own VAT obligations, check with HMRC or an accountant.