VAT calculator

Our VAT calculator does two jobs. It adds VAT to a net price so you can see what to charge, and it removes VAT from a gross price so you can see how much of a figure is tax. Both matter when you are quoting a job, checking a supplier invoice, or working out what actually lands in your bank. Here is how the maths works, the rates that apply in the UK, and when you need to worry about VAT at all.

How to add VAT to a price

Adding VAT is straightforward. You take the net price, the figure before tax, and add the VAT on top. At the standard rate of 20% you multiply the net by 1.2.

• Net price: £500
• VAT at 20%: £500 × 0.20 = £100
• Gross price: £500 + £100 = £600

So a job you have priced at £500 net is £600 to the customer once VAT is added. The calculator above does this the moment you type: leave it on "Add VAT", enter your net figure, and it shows the VAT and the gross total.

How to remove VAT from a gross price

Working VAT backwards catches a lot of people out. If a price already includes VAT, you cannot just take 20% off, because the 20% was added to the smaller net figure, not the larger gross one. To find the net, you divide the gross by 1.2.

• Gross price: £600
• Net price: £600 ÷ 1.2 = £500
• VAT: £600 − £500 = £100

There is a handy shortcut for the standard rate. The VAT inside a 20% gross price is always one sixth of it, so you can just divide the gross by six. £600 ÷ 6 = £100 of VAT. Switch the calculator to "Remove VAT" and it pulls the net and the VAT out of any gross figure for you.

UK VAT rates at a glance

There are three VAT rates in the UK. Most trade work sits at the standard rate, but it is worth knowing the others exist.

Which rate applies depends on the specific work, and the rules around the reduced and zero rates are narrow. When in doubt, check the job against the current HMRC guidance or ask your accountant rather than guessing.

Do tradespeople need to register for VAT?

Not everyone does. You must register for VAT once your VAT-taxable turnover goes over the registration threshold in any rolling 12-month period. That threshold was £90,000 under the 2024/25 rules, so check the current figure before you rely on it. Below that, registering is optional.

If you are not registered, you do not add VAT to anything. You charge your price and that is that. Once you are registered, you charge VAT on your work and hand it to HMRC, but you can also reclaim the VAT on things you buy for the business, like materials, tools and van costs.

Some sole traders register voluntarily before they have to, usually because most of their customers are VAT-registered businesses who can reclaim it, or because they want to claim back VAT on a lot of materials. If most of your customers are homeowners who cannot reclaim it, registering early just makes you 20% dearer to them, so it is a decision worth thinking through.

Is there VAT on labour as well as materials?

Yes. A common myth is that VAT only applies to materials. If you are VAT-registered, you normally charge VAT on the whole invoice, your labour and your materials together, at the standard rate. There is no VAT-free labour.

There are exceptions worth knowing. Certain construction work qualifies for the reduced 5% or zero rate, such as some energy-saving installations or work on new builds. And if you are a VAT-registered subcontractor working for another VAT-registered contractor under the Construction Industry Scheme, the domestic reverse charge usually applies. Under the reverse charge you do not add VAT to your invoice at all; instead you note that the reverse charge applies and the contractor accounts for the VAT. It is a cashflow change worth getting right, so speak to your accountant if it affects you.

The VAT Flat Rate Scheme

Smaller VAT-registered businesses can use the Flat Rate Scheme, where you charge your customers the normal 20% but pay HMRC a lower fixed percentage of your gross turnover and do not reclaim VAT on most purchases. It trades a bit of what you can reclaim for simpler bookkeeping. Whether it leaves you better off depends on how much you spend on materials, so it is worth running the numbers with your accountant before you opt in.

Putting VAT on your quotes and invoices

Once you know the rate, the last thing you want is to be running this sum on every line by hand. Getting VAT right on a quote is part of pricing the job properly in the first place. If you are still working out your numbers, start with how to price a job so you actually make a profit, and make sure you are not confusing markup with margin while you are at it.

When it comes to sending the document, Snapquo handles the VAT for you. Set your rate once, and every quote and invoice adds it on each line, shows a clear net, VAT and gross total, and sends with a pay link so you get paid faster. No spreadsheets, no dividing by six in your head on the driveway.

This tool and guide are for general information and are not tax advice. VAT rates, thresholds and rules change, and the right treatment depends on your specific work. Check the current HMRC guidance or speak to a qualified accountant before you rely on a figure.