VAT rate
£100.00 × 1.2 = £120.00
How to add VAT to a price
Multiply the price before VAT by 1 plus the rate. At the standard rate of 20%, that is × 1.2: £45 becomes £54, and £1,250 becomes £1,500. At the reduced rate of 5%, multiply by 1.05: £300 becomes £315.
In your head, 20% is a fifth: divide by 5 and add. £35 plus £7 is £42.
How to remove VAT from a price
Divide the price including VAT by the same number: £54 ÷ 1.2 = £45. Never take 20% off a price that already includes VAT: on £120 that gives £96, while the price before VAT is £100.
HMRC's VAT guide (VAT Notice 700) calls the share of VAT inside a price the VAT fraction: the rate divided by 100 plus the rate. At 20%, it is 20/120, one sixth, so £2.40 including VAT contains 40p of VAT.
| VAT rate | Add VAT: multiply by | Remove VAT: divide by | VAT fraction of the total |
|---|---|---|---|
| 20% (standard) | 1.2 | 1.2 | 1/6 |
| 5% (reduced) | 1.05 | 1.05 | 1/21 |
| 0% (zero) | 1 | 1 | none |
UK VAT rates
According to GOV.UK, the standard rate is 20% and applies to most goods and services; it has been 20% since 4 January 2011. The reduced rate of 5% applies to some goods and services, such as children's car seats and home energy, and the zero rate to items such as most food and children's clothes. Some things are exempt from VAT, such as postage stamps and financial and property transactions.
VAT at 20% on common amounts
| Before VAT | VAT at 20% | Including VAT |
|---|---|---|
| £10 | £2 | £12 |
| £45 | £9 | £54 |
| £99 | £19.80 | £118.80 |
| £149.99 | £30.00 | £179.99 |
| £500 | £100 | £600 |
| £1,250 | £250 | £1,500 |
For the method step by step, with receipts and quotes, read our guide to working out VAT at 20%. For other percentage questions, use the percentage calculator.
Do it in your head next time
Kalc trains times tables, fractions, percentages and algebra in about ten minutes a day.
Frequently asked questions
How do you add 20% VAT to a price?
Multiply the price before VAT by 1.2. £45 becomes £54.
How do you remove VAT from a price?
Divide the price including VAT by 1.2 at the standard rate. £54 including VAT is £45 before VAT.
What is the VAT fraction at 20%?
One sixth, according to HMRC: the rate divided by 100 plus the rate, 20/120. At 5%, it is 1/21.
What are the VAT rates in the UK?
20% standard rate, 5% reduced rate and 0% zero rate, according to GOV.UK. Some items are exempt.
Why can't you just take 20% off a price including VAT?
Because VAT is 20% of the price before VAT. Taking 20% off £120 gives £96, but the price before VAT is £100.