Enter the gross amount, and choose the calculation type, enter the VAT rate and click on the Calculate.
How to Calculate VAT?
VAT Amount = Total Amount – Net Amount
- Add VAT = Total Amount = Net Amount + (Net Amount × VAT Rate)
- Remove VAT = Net Amount = Total Amount ÷ (1 + VAT Rate)
- Total Amount = Net Amount + VAT Amount
Example:
Assume a product cost is £50,000 and the VAT rate is 20%.
- VAT Amount: £50,000 × (20 / 100) = £10,000
- Add VAT: £50,000 + VAT Amount = £50,000 + £10,000 = £60,000
- Remove VAT: Amount – Amount × {1 / (1 + VAT rate / 100)}
- VAT amount: £50,000 – (£50,000 × (1 / 1.20)) = £8333.33
- Amount without VAT = (£50,000 × 0.833333) = £41,666.67
VAT Overview
VAT is a tax that is levied on the sale of goods or services. It is an indirect tax and comes under a multi-stage tax system that is levied on the sale and purchase of goods or services at every stage of production.
Note: To receive the latest VAT updates, you can subscribe to HM Revenue & Customs (HMRC). Read more here about how you can receive VAT updates by email from GOV.UK.
How Many Countries Use VAT?
More than 170 countries in the world impose value-added tax (VAT). VAT rates differ in different countries; Read more about countries that charge VAT on goods and services.
Useful Links
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VAT Calculator by Country | Check Here |
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