Reverse calculator
Reverse VAT calculator, gross price back to net
Enter a VAT inclusive figure and get the net amount plus the VAT included. Divides by 1.20 at the standard rate or 1.05 at the reduced rate, in pounds sterling.
| Rate | Applies to |
|---|---|
| 20 % — Standard rate | Most goods and services |
| 5 % — Reduced rate | Domestic fuel and power, energy saving materials, child car seats |
| 0 % — Zero rate | Most food, books, newspapers, children's clothing |
- Net = gross ÷ 1.20 at the standard rate and gross ÷ 1.05 at the reduced rate.
- VAT = gross − net. A 120 pound gross invoice is 100 pounds net plus 20 pounds VAT.
- The VAT fraction HMRC publishes is 1/6 of the gross at 20 percent, so taking 20 percent off the gross gives the wrong answer.
How do I remove 20 percent VAT from a gross figure?
Divide the gross amount by 1.20. The result is the net amount, and the difference is the VAT, which equals one sixth of the gross.
What is the VAT fraction?
At 20 percent the fraction is 1/6, at 5 percent it is 1/21. HMRC uses these fractions to extract VAT from VAT inclusive prices.
Why can I not just subtract 20 percent?
VAT is charged on the net value. Taking 20 percent off 120 pounds gives 96 pounds, whereas the correct net figure is 100 pounds.
Does this work for the domestic reverse charge?
Use it to identify the VAT that would have applied. Under the construction domestic reverse charge the invoice shows no VAT and states that the customer accounts for it.
Can I use it for flat rate scheme figures?
Yes for extracting VAT from customer prices. Your flat rate payment to HMRC is a percentage of your VAT inclusive turnover set by your trade sector.