Question 1

How do I work out VAT backwards from a gross price?

Accepted Answer

Divide the VAT-inclusive price by 1.2 (for the 20% standard rate) to get the net amount, then subtract it from the gross to find the VAT. Example: £120 ÷ 1.2 = £100 net, so £20 is VAT. For the 5% reduced rate, divide by 1.05.

Question 2

What are the UK VAT rates in 2026?

Accepted Answer

Three rates apply: 20% standard (most goods and services), 5% reduced (domestic energy, children's car seats, some renovations) and 0% zero rate (most food, books, children's clothing, exports). Some supplies are exempt entirely, such as insurance and education.

Question 3

When do I have to register for VAT in the UK?

Accepted Answer

When your taxable turnover exceeds £90,000 over any rolling 12-month period, or when you expect to cross that figure in the next 30 days. The threshold has been £90,000 since April 2024.

Question 4

What is the difference between net, gross and VAT?

Accepted Answer

Net is the price before VAT, gross is the price including VAT, and VAT is the difference. At the 20% rate: net £100 → VAT £20 → gross £120.

Rate	Name	Applies to
20%	Standard	Most goods and services
5%	Reduced	Domestic fuel and power, children's car seats, certain renovations
0%	Zero	Most food, books and newspapers, children's clothing, exports
—	Exempt	Insurance, finance, education, health: no VAT and no input VAT recovery

UK VAT Calculator

UK VAT Rates in 2026

Key UK VAT Facts

VAT worked out on every invoice, automatically