VAT Reverse Calculator

What Is a VAT Reverse Calculator?

A VAT Reverse Calculator works backwards from a price that already includes VAT. Instead of adding VAT to a net price, it separates the VAT from the total and calculates the original price before VAT.

This is useful when you have been given a VAT-inclusive price and need to determine the VAT amount or the corresponding VAT-exclusive price. The calculator uses the selected VAT rate to perform the calculation automatically.

Why Use a VAT Reverse Calculator?

Removing VAT requires a different calculation from simply subtracting the VAT percentage from the total. This calculator applies the correct reverse VAT formula to provide a VAT-exclusive amount and the VAT component.

How to Use the VAT Reverse Calculator

Use the calculator when you know the VAT-inclusive price and need to determine the amount before VAT and the VAT contained within the total.

1. Enter the VAT-inclusive price — Enter the total price, including VAT, in pounds.
2. Select the VAT rate — Choose the applicable VAT rate. The standard 20% UK VAT rate is selected by default.
3. Enter a custom rate if required — Select Custom rate if you need to use a VAT percentage not included in the standard options.
4. Calculate reverse VAT — Select Calculate Reverse VAT to display the VAT-exclusive price and VAT amount.

How to Remove VAT from a Price

When a price already includes VAT, you cannot correctly remove VAT by simply subtracting 20% from the total. The VAT is a proportion of the VAT-inclusive price, so the reverse calculation uses division instead.

For a 20% VAT rate, divide the VAT-inclusive price by 1.20 to find the price before VAT. The VAT amount is then the difference between the VAT-inclusive price and the VAT-exclusive price.

20% VAT Reverse Calculation Formula

The formula for removing 20% VAT is: VAT-exclusive price = VAT-inclusive price ÷ 1.20. The VAT amount can then be calculated as VAT-inclusive price − VAT-exclusive price.

Example of Removing 20% VAT

If an item costs £120 including 20% VAT, divide £120 by 1.20 to obtain £100 before VAT. The VAT included in the £120 total is therefore £20.

VAT Reverse Calculation and VAT Fractions

At a 20% VAT rate, the VAT component of a VAT-inclusive price is calculated using the VAT fraction 20/120. This simplifies to 1/6. Therefore, for a VAT-inclusive amount subject entirely to 20% VAT, multiplying the total by 1/6 gives the VAT amount.

For other VAT rates, the corresponding VAT fraction is calculated as the VAT rate divided by 100 plus the VAT rate. For example, at 5% VAT, the VAT fraction is 5/105. The calculator applies the appropriate formula automatically based on the rate selected.

The calculator provides mathematical results based on the VAT rate entered. It does not determine whether a particular product or service is legally subject to VAT, which VAT rate should apply to a transaction, or whether a business is required to register for VAT.

Frequently Asked Questions