Add VAT to a net price
Convert the percentage to a decimal by dividing by 100. Multiply the net value by that decimal for VAT, then add the result to net. At 20%, £75 × 0.20 = £15, so gross is £90. A shortcut is £75 × 1.20.
Remove VAT from a gross price
Divide gross by one plus the decimal rate. At 20%, £90 ÷ 1.20 = £75. Subtract net from gross to find the £15 VAT. The divisor at 5% is 1.05. At 0%, net and gross are the same.
Check your work
Take your calculated net amount and add VAT again at the same rate. It should reproduce the original gross amount within the rounding used. This reverse check catches a common error: multiplying gross by the VAT percentage rather than extracting the tax already included.
Multiple items and pennies
For mixed-rate invoices, apply the appropriate rate to each line or rate group. Decide how your accounting system rounds and use that consistently. If two systems differ by a penny, compare their line-level calculations before changing the original price.
Keep learning
Official sources
Sources checked: 2026-09-26. Check the official guidance for later changes.
Educational information and estimates. These tools do not submit VAT returns or determine the treatment of a specific transaction.