Start with the three amounts
A price before VAT is its net value. VAT is the tax component. The final price including VAT is its gross value. These names describe parts of the same transaction, not three separate payments. An illustrative £100 net sale plus £20 VAT creates a £120 customer bill.
Follow the money
Think of VAT collected on sales separately from trading income. VAT on purchases also needs its own records. The amount payable under ordinary VAT accounting often reflects sales VAT less allowable purchase VAT, with any required adjustments. Special schemes can change the calculation or its timing.
A simple bookkeeping example
Imagine £400 of output VAT and £150 of recoverable input VAT in a period, with no other adjustments. The arithmetic difference is £250. A price calculator cannot confirm that the entire £150 is recoverable, nor can it prepare all the return boxes. Keep supporting documents alongside the calculation.
Your first practical steps
Identify what you sell, check its VAT treatment, track taxable turnover and understand any registration obligation. Then agree how your records and invoices will be maintained. The guides below separate these decisions so you can work through them in order rather than assuming every sale has the same treatment.
One price. Three parts.
Move the rate slider to see how VAT changes a £100 net price.
£100 + £20 VAT = £120 total
This slider explains the arithmetic. It does not determine the legal rate for your sale.
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.