UK VAT · UPDATED 4 SEPTEMBER 2026

UK VAT rates in 2026

The standard UK VAT rate is 20%. Here is the reliable way to move between net, VAT and gross amounts—and why the correct rate must be checked first.

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6 minute read · Reviewed against GOV.UK information

Adding 20% VAT to a net price

Multiply a VAT-exclusive amount by 1.20. The difference between the result and the original amount is the VAT.

Gross price = net price × 1.20

For £100 net, VAT is £20 and the customer pays £120. For £750 net, VAT is £150 and the gross total is £900.

Removing VAT from a gross price

A common mistake is to subtract 20% from the gross amount. Instead, divide the VAT-inclusive amount by 1.20 because that price represents 120% of the net value.

Net price = gross price ÷ 1.20

To isolate the VAT included in a standard-rated gross amount, divide the gross amount by 6. A £120 total therefore contains £20 VAT.

Standard, reduced, zero-rated and exempt

Most taxable goods and services use the standard rate. Qualifying items may use 5% or 0%. Zero-rated supplies are still taxable supplies charged at 0%, while exempt supplies are outside VAT charging in a different way. The distinction can affect VAT recovery and record-keeping.

Temporary measures can also change the treatment of specific supplies for a limited period. Always check the transaction date and current HMRC guidance.

Before using a VAT result

• Check whether the entered amount includes VAT.
• Confirm that the supply is standard-rated.
• Use invoice-level rounding consistently.
• For cross-border, mixed or unusual supplies, check HMRC guidance or ask a qualified adviser.

Official sources: HMRC — charging VAT and VAT rates on different goods and services. This guide is general information, not tax or legal advice.