UK VAT Calculator 2025/26 – Add or Remove VAT
Quickly convert between net and gross amounts at 20%, 5% or 0%. Fast, accurate, mobile-friendly.
✓ HMRC-aligned maths • ✓ CSV export • ✓ Updated for 2025/26
Common VAT Calculations at 20% (Standard Rate)
Quick reference for common contractor invoicing scenarios. Tap copy to use any figure.
| Net Amount | VAT (20%) | Gross Total | Copy |
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About This UK VAT Calculator
This free VAT calculator helps UK contractors, freelancers, and businesses convert between net (excluding VAT) and gross (including VAT) amounts. Use it for invoicing, quotes, and expense checks — with instant, accurate results.
How to Use This Calculator
- Choose your mode: “Net → Gross” to add VAT, or “Gross → Net” to remove VAT
- Enter the amount: Type your net or gross figure (depending on mode)
- Select VAT rate: 20% (standard), 5% (reduced), 0% (zero-rated), or custom
- Get results: Copy any value or download a CSV
How VAT Is Calculated
- Add VAT (Net → Gross): VAT = Net × rate; Gross = Net × (1 + rate)
- Remove VAT (Gross → Net): Net = Gross ÷ (1 + rate); VAT = Gross − Net
UK VAT Rates 2025/26
- Standard (20%): Most services and goods (incl. contractor services)
- Reduced (5%): e.g., domestic energy, children’s car seats
- Zero (0%): e.g., most food, children’s clothes, books, newspapers
- Exempt: e.g., insurance, education, health services, postal services, residential rent
See the official HMRC guidance for full details.
When Do Contractors Need to Register for VAT?
If your taxable turnover exceeds £90,000 (2025/26 threshold) in any rolling 12 months, you must register within 30 days. Voluntary registration can still make sense if your clients are VAT-registered and you incur VATable costs. Check GOV.UK thresholds.
Flat Rate VAT Scheme for Contractors
The Flat Rate Scheme (join under £150,000 turnover) lets you pay a fixed percentage of gross turnover instead of tracking VAT on each purchase. Many IT contractors are 14.5% by category; limited cost traders must use 16.5% (if goods are under 2% of turnover or under £1,000/year).
Common VAT Mistakes
1) Subtracting 20% instead of dividing by 1.20
Wrong: £1,200 × 0.80 = £960. Right: £1,200 ÷ 1.20 = £1,000 (VAT £200).
2) Not checking overseas client VAT status
Most B2B services to overseas businesses are outside scope (reverse charge). For EU, validate VAT numbers via VIES.
3) Ignoring the limited cost trader rule
On the Flat Rate Scheme, limited cost traders must use 16.5% instead of their industry rate.
4) Confusing invoice dates with payment dates
On invoice (accrual) basis you owe VAT when invoiced, not when paid. Consider cash accounting if cash flow is tight.
5) Missing VAT invoice details
You need a valid VAT invoice to reclaim input VAT (supplier VAT number, date, unique number, description, VAT split). Simplified rules apply under £250 gross.
More: HMRC VAT Guide (Notice 700).
Frequently Asked Questions
VAT is charged on most UK goods/services. VAT-registered businesses charge VAT on sales (output tax) and reclaim VAT on purchases (input tax). You pay/reclaim the difference to/from HMRC.
Register when rolling 12-month taxable turnover exceeds £90,000 (2025/26). Voluntary registration can help if clients reclaim VAT and you have VATable costs.
Good for low-expense contractors. Pay a fixed % of gross. Watch the 16.5% limited cost trader rule; reclaim on most purchases isn’t allowed (except certain capital assets).
Gross = Net × 1.20 (for 20%). Example: £500 × 1.20 = £600.
Net = Gross ÷ 1.20 (for 20%). VAT = Gross − Net.
Zero-rated: No VAT charged; you can reclaim input VAT. Exempt: No VAT charged; you generally can’t reclaim related input VAT.
Last updated: 15 January 2025 | Updated for: 2025/26 UK tax year
This VAT calculator provides arithmetic calculations only. Always verify with HMRC VAT guidance or a qualified accountant.
ContractorUK is not responsible for decisions made based on this calculator.