United Kingdom VAT Calculator 2026
20% standard, with reduced rate of 5% on specified categories.
Figures last reviewed
United Kingdom VAT at a glance
- Standard VAT rate
- 20% — ranked 16 of 36 covered here
- Reduced rate
- 5% — applies to specified categories only
- Compared with the average
- +3.01 pts — average across the 36 countries covered is 16.99%
- Registration threshold
- 90,000 GBP — annual turnover above which registration becomes compulsory
- Rates verified
- 17 August 2026 — checked against the issuing tax authority
How VAT works in United Kingdom
Standard 20%, Reduced 5% (fuel, utilities), Zero-rated (food, books, children's clothing)
Calculating United Kingdom VAT
Start from the price excluding tax
VAT is charged on the net price. At 20%, a net GBP 100 becomes GBP 120.00 once VAT of GBP 20.00 is added.
To work backwards, divide — never subtract
Removing VAT from a gross figure means dividing by 1.2000, not subtracting 20%. Subtracting the percentage from the gross amount understates the net price, and the error grows with the rate.
Check which rate actually applies
United Kingdom applies a reduced rate of 5% to specified categories. Standard 20%, Reduced 5% (fuel, utilities), Zero-rated (food, books, children's clothing) Using the standard rate on a reduced-rate supply overstates the tax.
Registration is threshold-based
Businesses with taxable turnover above GBP 90,000 a year must register and charge VAT. Below it, registration is usually voluntary — worth doing when your customers can reclaim the tax.
Worked example at 20%
Adding and removing VAT at 20%
| Component | Adding to a net price | Removing from a gross price |
|---|---|---|
| Starting amount | GBP 100.00 | GBP 1,000.00 |
| VAT at 20% | (GBP 20.00) | (GBP 166.67) |
| Result | GBP 120.00 | GBP 833.33 |
So a net price of GBP 100.00 in United Kingdom costs GBP 120.00 once VAT is added. Working the other way, a gross price of GBP 1,000.00 contains GBP 166.67 of VAT, leaving GBP 833.33 net.
Computed from the same 20% rate the calculator applies, so this table and the calculator cannot disagree.
Countries with a similar rate
United Kingdom VAT questions
What is the VAT rate in United Kingdom?
The standard rate is 20%. Reduced rate of 5% apply to specified categories. That places United Kingdom 16 of 36 of the countries covered here, 3.01 points above the 16.99% average.
How do I remove VAT from a price in United Kingdom?
Divide the gross amount by 1.2000. At 20%, a gross GBP 1,000 works back to GBP 833.33 net with GBP 166.67 of VAT. Subtracting 20% from the gross figure is the common mistake and gives the wrong answer.
When do I have to register for VAT in United Kingdom?
Once taxable turnover passes GBP 90,000 a year. Registering voluntarily below the threshold lets you reclaim input tax, which usually pays off if you sell mainly to other registered businesses and costs you if you sell to consumers.
Which countries have higher and lower rates than United Kingdom?
Of the countries covered here, Finland has the highest standard rate at 25.5% and United Arab Emirates the lowest at 5%. United Kingdom sits at 20%.