VAT Calculator Plus

Updated on July 20, 2022

Working Out VAT

Do you want to figure out how much VAT is going to cost you? Then, I’ll describe the process in detail for you.

The math comes next, after which I’ll go over Gross and Nett.

VAT is included in the gross price. Also known as “VAT included.”

The Nett price is the total cost minus any applicable sales tax.

Also known as “net” or “ex VAT.”

Work out your ratio

In order to perform these calculations, a ratio is multiplied or divided (also called the VAT fraction).

To get started, you’ll need to know what your current ratio is. As it turns out, it’s a simple problem to solve. Divide your VAT rate by 100 and add 1 to get your effective VAT rate. A 20% rate, for example, yields a 1.20:1 ratio (20/100 = 0.2 + 1 = 1.2)

A rule of thumb is to simply write “1.” in front of the VAT rate, so 20% becomes 1.20, 17.5 percent becomes 1.175, and 5 percent becomes 1.05 so that it’s easy to remember.

Using a 20% VAT rate in the United Kingdom, the ratio is 1.20. If you live in Germany and your interest rate is 23%, the ratio is 1.23.

Adding VAT

The process of adding VAT to an amount is simple. In order to calculate your Nett amount, you just multiply your ratio.

Consider the following scenario: You are selling a chair for £150 net, and you must include 20% VAT in order to arrive at the final gross price including VAT.

150 multiplied by 1.20 results in 180.

This results in a total of £180, which includes VAT.

Removing VAT

The process of deducting the VAT from an amount is exactly as simple (provided you have a calculator, I’m bad at division).

It’s as simple as dividing your Gross Revenue by the ratio you’ve chosen.

This is how you calculate the Nett price if you bought a table at a gross price of £180 and included 20% VAT.

One hundred and twenty equals one hundred and twenty

As a result, the Nett amount is £150.

Finding the VAT amount from a Gross amount

If you want to know how much VAT is in a total gross sum, you need to know that. Removing VAT means subtracting the net amount from the gross, thus subtract the net amount from the gross.

It is possible to calculate how much VAT you paid if you purchased a £180 table with 20% added to the gross price as follows:

dividing 180 by 1.20 gives us 150.

In the same way, and so on and so on.

Thirty decimal places separate 180 and 150.

This is why the VAT is 30 pounds.

In order to better understand VAT, please read this page. If you’d rather, you can use our VAT Calculator, which is simple to use.