VAT Calculator · Practical guide
How to Remove VAT From a Price
Divide the tax-inclusive price by 1 plus the VAT rate — never just subtract the percentage off the total.
At a glance
The Short Answer
To remove VAT, divide the gross (tax-inclusive) price by 1 + rate. At 20%, divide by 1.20: a £120.00 price becomes £100.00 net, and the VAT portion is £120.00 − £100.00 = £20.00. Choose Remove VAT in the calculator above and it shows net, VAT, and gross in one step.
Interactive tool
VAT Calculator
Enter your own values, then compare the result with the examples below.
VAT Breakdown
The Formula
net = gross ÷ (1 + rate) and VAT = gross − net, with the rate as a decimal (20% = 0.20). You divide instead of multiply because the tax was charged on the net price, not the gross.
Why Taking 20% Off the Gross Is Wrong
A common mistake: £120.00 × 20% = £24.00, so people assume the VAT is £24.00 and the net is £96.00. Prove it wrong in reverse — £96.00 plus 20% VAT is £96.00 × 1.20 = £115.20, not £120.00. The true VAT of £20.00 is 20% of the net but only 16.67% of the gross.
VAT Share of a Tax-Inclusive Price
The VAT inside a gross price is always rate ÷ (1 + rate):
| VAT Rate | VAT Share of Gross | VAT in a 100.00 Gross Price |
|---|---|---|
| 5% | 4.76% | 4.76 |
| 19% | 15.97% | 15.97 |
| 20% | 16.67% | 16.67 |
| 21% | 17.36% | 17.36 |
| 25% | 20.00% | 20.00 |
So a 100.00 receipt at a 20% rate contains 16.67 of VAT and 83.33 of net — handy for expense reports and reclaim calculations.
Frequently Asked Questions
How do I calculate net from gross at 20% VAT?
Divide the gross amount by 1.20. A £240.00 gross price gives £200.00 net, with £40.00 of VAT.
What fraction of a VAT-inclusive price is the tax?
Rate divided by 1 plus rate. At 20% that is 20/120 = 16.67% of the gross; at 25% it is exactly 20% of the gross.
Why is removing VAT done by dividing?
Because the rate was applied to the pre-tax net price, not the total. Dividing by 1 + rate reverses that multiplication exactly.
Does this work for reduced VAT rates?
Yes. Use the same formula with the reduced rate — at 5%, divide the gross by 1.05 to get the net amount.