Calculate VAT backwards or forwards and remove VAT
Reverse UK VAT Calculator or How to calculate UK VAT Backwards, Forwards or in Reverse
If you are running an online shop, you will often have to enter your prices excluding VAT in the admin area of your website.
On the front end of your website you may want this to be ‘clean price’ or a ’rounded price’ for your customers to view (e.g. £20.00, £25.00 or £100.00).
You may also want this price to include VAT.
The Vat Calculator allows you to add a clean rounded figure and then calculate the VAT portion for you.
You can then add the price to your shop knowing that the figure displayed on the front end will be a nice and clean ‘vat-inclusive’ figure.
This gives your customer a clean price on the front end of your website with VAT included.
How do I work out VAT on a price?
To work out a price including VAT (20%), multiply the price excluding VAT by 1.2.
To work out a price including VAT (5%), multiply the price excluding VAT by 1.05
Is VAT Calculated on net or gross?
Adding 20% VAT is a straightforward calculation but reverse VAT can be tricky
Adding 20% VAT to a price is easy, (simply multiply by 1.2)
e.g. to add 20% VAT to £100.00 simply multiply £100.00 x 1.2 = £120.00
But calculating what is the VAT portion of £120.00 is not as simple as taking 20% of £120.00 (which leaves £96.00).
Notice how adding 20% VAT is not the same as removing 20% VAT
Calculating VAT ‘backwards’ or calculating VAT in ‘reverse’ can sometimes be tricky – as you can’t simply take 20% off the VAT included price to calculate the VAT portion.
To help you out we have developed this handy little VAT Calculator, that calculates VAT ‘backwards’ or ‘forwards’ or in ‘reverse’, if you prefer.
How to use the VAT Calculator
Simply enter the amount you want to work with, select whether that amount already includes VAT or not and hey presto! – you have VAT Calculated forwards or backwards.
Simply tick or untick the ‘Does this include VAT?’ box, to show the figure as VAT included or VAT excluded.
How to remove VAT from a sum manually
Divide the gross amount by (1 + VAT %)
VAT Rate is 20% so divide by 1.20
£100.00 divided by 1.20 = £83.33
Subtract £83.33 from £100.00 = £16.67
Therefore £16.67 is the VAT Amount on an item sold for £100.00.
If you try this sum on the VAT Calculator you will see that it is correct.
The VAT Calculator can be used to:-
- Calculate VAT.
- Remove VAT from a figure.
- Work out the VAT on a price or figure.
- Calculate the VAT inclusive portion of a price for a product or service.
- Calculate VAT from gross.
- Calculate VAT backwards
(e.g. adding VAT to £1.00 is £1.20, add 20%. Removing VAT is not £0.80 – try the VAT Calculator to see)
- Calculate the VAT content of a number, which is inclusive of VAT.
- Calculate VAT Backwards.
- Calculate the VAT element of a price.
- Calculate VAT from the total price of a product or service which includes VAT.
- Take 20% off a price or any number.
- Add or subtract VAT from a number.
- Calculate sales tax backwards.
- Show how to work out VAT content at 20%
- Show how to get a number that includes VAT to exclude VAT
How does VAT Work?
When a business becomes VAT registered, it must charge a further 20% on all sales (or whatever the vat rate is), when the invoice is paid that is when VAT is deducted. Businesses must also pay their VAT Return every 3 months to HMRC, before this is paid the business will take away any VAT that is for their suppliers.
What is the current VAT (Value Added Tax) Rate in the UK in 2020?
There are 3 basic rates of VAT in the United Kingdom which are applied to goods and services.
The Standard VAT rate in the UK is 20%
This is the VAT rate most commonly used in the UK and covers most goods and services.
The VAT Calculator above is used for calculating this rate both adding VAT to a number and subtracting VAT from a number.
The 20% Value Added Tax Rate has been in place since 4th January 2011.
The rate was previously 17.5%.
The Reduced VAT Rate is 5%
Some goods and services use the Reduced VAT Rate (e.g. Home Energy)
The UK government has also introduced a 5% VAT rate from 8th July 2020 to 12 January 2021 as a temporary measure.
Who does the new 5% VAT Rate apply to?
The new 5% rate applies to businesses that make ‘supplies of admissions’ that are currently taxable at the standard rate.
Examples provided by the government include:-
- amusement parks
And similar cultural events and facilities.
The rate is aimed at admission fees only but can include incidental items that are included in the admission fees.
You can find out more about the new 5% VAT rate on the government’s website.
The Zero Rate VAT is 0%
Food and children’s clothes are examples of goods and services that are 0% VAT Rated.
Helpful VAT Links
Making Tax Digital for VAT 2020
On 13 July 2017, the Financial Secretary to the Treasury and Paymaster General announced that Making Tax Digital for VAT will come into effect from April 2019.
From that date, businesses with a turnover above the VAT threshold (which is currently £85,000) will have to keep their records digitally (for VAT purposes only), and provide their VAT return information to HM Revenue and Customs (HMRC) through Making Tax Digital (MTD) functional compatible software.
Find out more about Making Tax Digital (MTD) and how it will affect your business.
How do I calculate VAT on my calculator?
To calculate VAT having the gross amount you should divide the gross amount by 1 + VAT percentage. (i.e if it is 20%, then you should divide by 1.20), then subtract the gross amount.
I am trying to work out the gross and net amount but I only know the VAT element?
How to work out the gross and net figures if you only have the VAT element.
For a VAT rate of 20% you multiply the figure by 5.
e.g. VAT portion is £20.00
£20.00 x 5 = £100.00
If you add this to the VAT Calculator it will confirm that multiplying by 5 is correct.
£100.00 at 20% VAT is £120.00
What is the Bank Account and Sort Code for making VAT Payments?
When making payments to HMRC for VAT use the following bank details.
Sort code – 08 32 00
Account Number – 11963155
Account Name – HMRC VAT
HMRC VAT Helpline
HMRC operate a dedicated VAT advice service helpline.
0300 200 3700
Outside the UK for VAT enquiries call
+44 2920 501 261
Written VAT enquiries can be sent to
HM Revenue and Customs – VAT Written Enquiries Team
21 Victoria Avenue
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