Question 1

How do I calculate VAT from a gross price?

Accepted Answer

To find the VAT amount from a price that includes VAT: VAT Amount = Gross Price × (VAT Rate ÷ (100 + VAT Rate)). For example, at 20% VAT on a £120 price: £120 × (20 ÷ 120) = £20 VAT. The net price is £100.

Question 2

What is the standard VAT rate in the UK?

Accepted Answer

The UK standard VAT rate is 20%, which applies to most goods and services. The reduced rate is 5% for items like children's car seats and home energy. Some items like food, books, and children's clothing are zero-rated (0%).

Question 3

What is the difference between VAT and sales tax?

Accepted Answer

VAT (Value Added Tax) is applied at each stage of production and distribution, with businesses claiming back VAT on their inputs. Sales tax is only applied at the final point of sale to the consumer. VAT is used in most of the world (EU, UK, Australia as GST), while sales tax is common in the US.

Question 4

How do I add VAT to a net price?

Accepted Answer

Multiply the net price by (1 + VAT rate ÷ 100). For example, at 20% VAT on a £100 net price: £100 × 1.20 = £120 gross. The VAT amount is £20.

Question 5

What VAT rates are used around the world?

Accepted Answer

Common standard VAT/GST rates: Germany 19%, France 20%, Italy 22%, Spain 21%, Australia 10% (GST), Canada 5% (GST + provincial), Japan 10%, India 18% (GST), Brazil varies 17-20%. This calculator supports any custom rate.

🧾 VAT Calculator