Free Tool
Remove VAT Calculator
Enter a price that already includes VAT. You get the price before VAT and how much of it was VAT.
Need to add VAT instead? Use the VAT calculator.
How to take VAT off a price
Divide by 1.2. That gives you the price before 20% VAT. Take that away from the price you started with and what is left is the VAT. For the 5% rate, divide by 1.05.
Don't multiply by 0.8. It is the most common mistake. Taking 20% off £120 leaves £96, but the price before VAT was £100. The VAT was 20% of the smaller number, so taking 20% of the bigger one takes off too much.
Worked examples at 20%
| Item | Price inc VAT | Before VAT | VAT |
|---|---|---|---|
| Box of screws and fixings | £60.00 | £50.00 | £10.00 |
| Power tool battery | £144.00 | £120.00 | £24.00 |
| A job quoted “inc VAT” | £1,200.00 | £1,000.00 | £200.00 |
When trades need to remove VAT
If you are VAT registered, you reclaim the VAT on materials and tools, so you need the VAT out of every receipt. If you are not registered, you still need a net price when a customer or main contractor asks for a figure “plus VAT”, or when you compare a trade counter price with one shown inc VAT.
Frequently Asked Questions
How do I remove 20% VAT from a price?
Divide the price by 1.2. £240 including VAT ÷ 1.2 = £200 before VAT, so the VAT is £40. For the 5% rate, divide by 1.05 instead.
Why can’t I just take 20% off?
Because the 20% was added to the net price, not to the total. Taking 20% off £120 gives £96, but the real net price is £100. Multiplying by 0.8 always undercounts the VAT, so always divide by 1.2.
What is the VAT fraction?
It is the share of a VAT-inclusive price that is VAT. At 20% it is 1/6, so the VAT in £120 is £120 ÷ 6 = £20. At 5% it is 1/21. HMRC uses the VAT fraction when a receipt only shows the total.
Can I reclaim the VAT I work out here?
Only if you are VAT registered and the purchase is for your business. You need a valid VAT invoice or receipt from the supplier, and you reclaim it on your VAT return. If you are not registered, the VAT is part of what the item cost you.
Stop doing VAT sums by hand
Traddie works out the VAT on every quote and invoice, and keeps the VAT on your expenses ready for your return.
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