Updated on 29 September 2026 by the Proposal Expert editorial team
Net to gross or gross to net, at the UK standard, reduced or zero rate.
This calculator adds UK VAT to a net price (multiply by 1.2 at 20%) or removes it from a gross price (divide by 1.2). Choose the direction, enter the amount and pick the rate: the standard rate of 20%, the reduced rate of 5% or the zero rate. You see the net amount, the VAT and the gross amount side by side, ready to use in a quote or to check a supplier's invoice.
Add VAT: net × (1 + rate ÷ 100) = gross. Remove VAT: gross ÷ (1 + rate ÷ 100) = net.
To add VAT, multiply the price excluding VAT by 1.2 at the standard rate or by 1.05 at the reduced rate, so the £60 chair in the gov.uk example becomes £72. To remove VAT, divide the price including VAT by the same factor. A table bought for £180 including 20% VAT cost £150 before VAT, and the £30 difference is the VAT. At the zero rate the net and gross amounts are the same.
Say you quote £1,250 excluding VAT for work at the standard rate, which covers most goods and services. Multiply £1,250 by 1.2 and the table shows the net amount, the VAT at 20% and the gross total your client pays. To check it the other way round, switch to removing VAT and enter the gross total from the table, and dividing by 1.2 takes you straight back to £1,250. When the figures are right, the final step is to put this price into a quote.
| Net | £1,250.00 |
|---|---|
| VAT 20% | £250.00 |
| Gross | £1,500.00 |
The UK has three VAT rates, and the rate a business charges depends on its goods and services. The standard rate has been 20% since 4 January 2011, when it went up from 17.5%. Some things are exempt from VAT, such as postage stamps, financial and property transactions. On a zero-rated sale you still include VAT on your invoice, at 0%. gov.uk gives these examples for each rate:
Working out VAT backwards, also called a reverse VAT calculation, starts from a price that already includes VAT. Divide the gross amount by 1.2 at the standard rate or by 1.05 at the reduced rate. The result is the net price, and the difference between the gross and the net price is the VAT. gov.uk shows this with a stairlift bought for £483 including 5% VAT. Dividing £483 by 1.05 gives £460, so the VAT is £23. Use it whenever a supplier gives you a VAT-inclusive figure and you want to compare it with net prices.
The classic mistake is to remove VAT by taking 20% off the gross price. The 20% was calculated on the net price, so taking it off the larger gross figure removes too much. HMRC's VAT guide gives the example of an item sold for £2.40 at 20%. The VAT is 40p, which is not 20% of £2.40 but one sixth of it. Taking 20% off would leave £1.92, while the correct net price is £2.00. HMRC calls the share of VAT inside a gross price the VAT fraction, worked out as the rate divided by 100 plus the rate.
HMRC's VAT guide (Notice 700, paragraph 17.5) lets businesses that invoice their customers round the total VAT on an invoice down to a whole penny, ignoring any fraction of a penny. If you work out VAT separately for each line, round each line either down to the nearest 0.1p or to the nearest 1p or 0.5p, and use the same method every time. The final VAT total may then be rounded down to the nearest whole penny. The concession applies only where the VAT charged to customers and the VAT paid to HMRC is the same. As a general rule it is not appropriate for retailers, who must not round the VAT figure down but may round each calculation up or down. If a quote and an invoice differ by a penny, the cause is usually rounding per line versus rounding on the total.
For private customers the VAT is simply part of what they pay, so quotes to consumers usually show VAT-inclusive prices, with a note such as "including VAT at 20%". VAT-registered business customers use your VAT invoice as evidence to reclaim the VAT you charge them, so they compare suppliers on the net price. Quotes to businesses therefore usually show net prices plus VAT: the price per line excluding VAT, the VAT and the total. Whatever you choose, state clearly whether each price includes or excludes VAT, so the invoice holds no surprises. Proposal Expert's price table calculates VAT and totals, including VAT per line, so the net, VAT and gross figures on your quote always match.
You must register for VAT if your total taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over £90,000 in the next 30 days. The threshold has been £90,000 since 1 April 2024, when it went up from £85,000. Taxable turnover is the total value of everything you sell that is not VAT exempt or out of scope, so zero-rated and reduced-rated sales count too. You can also choose to register below the threshold, which gov.uk calls voluntary registration. If you register late, you must pay VAT on any sales you have made since the date you should have registered. Keep an eye on the threshold when you send a large quote, because a single big order can take you over it.
If you are not VAT registered, you do not charge VAT. gov.uk is clear that you must register for VAT to start charging it. Your quote shows one price per line and a total, with no VAT line and no VAT number. A short note such as "Not VAT registered, no VAT will be charged" tells the client that nothing will be added later. If you have applied and are waiting for your VAT registration number, you cannot include VAT on your invoices yet. gov.uk says you can increase your prices to account for the VAT you will need to pay to HMRC, and tell your customer you are adding 20%. Once the number arrives, you reissue the invoice showing the VAT, and a VAT-registered customer can then reclaim it on their next VAT return.
Multiply the price excluding VAT by 1.2. If you only want the VAT itself, multiply the net price by 0.2.
Divide the price including VAT by 1.2 at 20%, or by 1.05 at 5%. Do not take 20% off the gross price, because that removes too much.
At 20% the VAT is one sixth of the gross price, and at 5% it is one twenty-first. HMRC calls this the VAT fraction.
No. Zero-rated goods and services, such as most food and children's clothes, carry VAT at 0%, and you still include them on your invoices. Exempt items, such as postage stamps, financial and property transactions, have no VAT charged on them. Zero-rated sales count towards the £90,000 registration threshold. Exempt sales do not.
No. You must register for VAT to start charging it, and you cannot include VAT on your invoices until you have your VAT registration number. From the date HMRC registers you, you must pay them any VAT you owe.