Reverse VAT Calculator UK — Extract VAT from a Price

How to use this calculator

1. 1 Enter the VAT-inclusive price from your receipt or invoice into the amount field.
2. 2 Select the VAT rate that applies: 20% for standard-rated goods and services, or 5% for reduced-rate items such as home energy or children's car seats.
3. 3 Read your two results: the net price (what the item cost before VAT was added) and the VAT amount (the portion that goes to HMRC).

How reverse VAT works

When you use a reverse VAT calculator, you are starting from the end rather than the beginning. Normally, you add VAT to a net price to create the total you pay. Reverse VAT does the opposite: you already have that final total, and you want to work back to find what the price was before VAT was included. VAT sits inside the number you have, and this calculator pulls it out.

This matters more often than you might expect. When a supplier sends you a receipt showing one total figure, you may need to split it into the net amount and the VAT for your records. When you submit an expense claim, your accounts team or bookkeeper will often need those two figures separately. When you receive a VAT invoice from a supplier, you might want to check that the VAT amount shown is correct. In all of these situations, reverse VAT gives you the answer in seconds.

Formula

Removing 20% VAT: Gross ÷ 1.20 = Net
Removing 5% VAT:  Gross ÷ 1.05 = Net
VAT amount:       Gross − Net

Worked example

Frequently asked questions

What is reverse VAT calculation?

Reverse VAT calculation is the process of working out the net (pre-VAT) price and the VAT amount from a VAT-inclusive total. Instead of adding VAT to a price, you are extracting it from a price that already includes it. The term "reverse" simply means you are running the VAT calculation backwards. It is useful any time you have a total figure and need to know how much of it is VAT, such as when checking a receipt, splitting an expense claim, or verifying a supplier invoice.

How do I extract VAT from a VAT-inclusive price?

Divide the VAT-inclusive price by 1.20 if the VAT rate is 20%, or by 1.05 if the rate is 5%. The result is the net price before VAT. To find the VAT amount itself, subtract the net price from the original gross figure. For example, a £240 total at 20% gives a net of £200 (£240 ÷ 1.20) and VAT of £40 (£240 − £200). You can verify your answer by multiplying £200 by 1.20, which should bring you back to £240.

What is the formula for removing 20% VAT from a price?

The formula is: Gross ÷ 1.20 = Net. The VAT amount is then Gross − Net. So for a £180 gross price: £180 ÷ 1.20 = £150 net, and £180 − £150 = £30 VAT. A common shortcut people try is to multiply by 0.8333, which gives the same result, but dividing by 1.20 is simpler and less prone to rounding errors. Never subtract 20% directly from the gross price, as this produces a different and incorrect answer.

What is the formula for removing 5% VAT from a price?

The formula is: Gross ÷ 1.05 = Net. The VAT amount is Gross − Net. For a £63 energy bill at 5%: £63 ÷ 1.05 = £60 net, and £63 − £60 = £3 VAT. Items that carry the 5% reduced rate in the UK include domestic energy, children's car seats, mobility aids, and certain residential property conversions. Always check the VAT rate on the original document, as applying the wrong rate will produce an incorrect split.

Can I reclaim VAT shown on a fuel receipt?

Yes, in most cases, but with conditions. You can reclaim VAT on fuel purchased for business use, though if the vehicle is also used privately, you may need to apply a fuel scale charge or restrict the amount you reclaim. The receipt must qualify as a valid VAT receipt, showing the supplier's VAT registration number, the date, a description of the supply, and the VAT amount or rate. A basic pump receipt without a VAT number is not sufficient for reclaiming input tax above a low threshold. The VAT Flat Rate Scheme Calculator may also be relevant if you account for fuel costs under the Flat Rate Scheme.

What is the difference between reverse VAT and the Domestic Reverse Charge?

Reverse VAT calculation is a maths process: you work out the VAT contained within a VAT-inclusive price. The Domestic Reverse Charge is an HMRC accounting rule that applies mainly in the construction industry. Under that rule, the customer, not the supplier, accounts for the VAT on certain construction services. The supplier issues an invoice without charging VAT, and the customer declares both the output tax and the input tax on their own VAT return. The two things share a similar name but are entirely unrelated.

How do I check if a VAT invoice amount is correct?

Start by identifying the net amount and VAT rate shown on the invoice. Multiply the net by the VAT rate (for example, £500 × 0.20 = £100) to get the expected VAT. Then check whether the VAT figure on the invoice matches. Alternatively, take the gross total and divide by 1.20 (for 20% VAT) to work out what the net should be, then subtract to find the implied VAT. If either figure differs from what the invoice states, contact the supplier to request a corrected invoice before putting it through your records.

What must a valid VAT receipt include?

For a full VAT invoice, HMRC requires the supplier's name and address, their VAT registration number, an invoice number, the invoice date, the date of supply (if different from the invoice date), a description of the goods or services, the net amount, the VAT rate applied, and the VAT amount charged. Simplified VAT receipts, which cover supplies of £250 or less, have reduced requirements: the supplier name, VAT number, date, description, and the total amount including VAT with the VAT rate indicated are generally sufficient.

Common mistakes

• Subtracting 20% from the gross price instead of dividing by 1.20. This is the most common error and it gives you the wrong answer. If you have a £120 gross price and subtract 20%, you get £96. But the correct net is £120 ÷ 1.20 = £100. The difference is £4, and over a year of expense claims or supplier invoices, that kind of error adds up. The reason subtracting 20% does not work is that 20% VAT was added to the net, not to itself, so you cannot remove it by subtracting the same percentage from the gross.
• Using the standard 20% rate when goods were charged at 5%. Some purchases, such as domestic energy bills, children's car seats, and mobility aids, carry a reduced VAT rate of 5%. If you apply the 20% formula to a 5%-rated receipt, you will calculate a much larger VAT amount than actually exists. Always check the VAT rate on the original document before choosing which formula to use.
• Confusing reverse VAT with the Domestic Reverse Charge. These are completely different things. Reverse VAT calculation is simply a maths process for working out the VAT inside a price. The Domestic Reverse Charge is a specific HMRC rule used mainly in the construction industry, where the customer (rather than the supplier) accounts for VAT on certain services. If a contractor tells you that reverse charge applies to their invoice, that is a VAT accounting rule, not a calculation method.
• Trying to reclaim VAT from a receipt that is not a valid VAT receipt. Not every receipt lets you reclaim VAT. To reclaim input tax, you generally need a VAT invoice or a document that meets HMRC's requirements for a simplified VAT receipt. A basic till receipt showing only the total, with no supplier VAT number, is not sufficient for reclaiming VAT above certain amounts. Check that the document shows the supplier's VAT registration number before putting it through your books.

VAT rules and HMRC guidance

The rules on VAT invoices and receipts are covered in detail in HMRC VAT Notice 700: The VAT Guide, which sets out how VAT should be charged, recorded, and reclaimed. Section 16 of that notice covers invoices specifically, including what information must appear on a full VAT invoice and when a simplified invoice can be used instead. You can read it at gov.uk/guidance/vat-guide-notice-700.

For guidance on reclaiming input tax — including the rules around receipts, mixed-use purchases, and fuel — the input tax sections of VAT Notice 700 are worth reading in full. If you are new to VAT or completing your first return, HMRC also provides a step-by-step guide at gov.uk/send-vat-return. You must keep VAT records for at least six years, and HMRC expects those records to include every relevant receipt and invoice.