VAT Inclusive vs VAT Exclusive
Understand the difference between VAT-inclusive (gross) and VAT-exclusive (net) prices. Use the calculator below to convert between them in either direction.
VAT-exclusive (net) price
The price before VAT is added. Also called ex-VAT or net. Used on B2B invoices as the base amount.
Example: £100 net
VAT-inclusive (gross) price
The price including VAT. Also called inc. VAT or gross. Used in consumer/retail pricing.
Example: £120 gross (= £100 + £20 VAT)
Add or remove UK VAT at 20%, 5%, or zero rate — instantly shows net, VAT amount, and gross total.
After calculating, copy the result into your workflow instead of searching for the calculator again.
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Next, you may need…
Next step: use a related calculator to continue the workflow.
Formula
Add VAT: Gross = Net × (1 + Rate ÷ 100)\nRemove VAT: Net = Gross ÷ (1 + Rate ÷ 100)
At 20%: Net × 1.20 = Gross; Gross ÷ 1.20 = Net. At 5%: Net × 1.05 = Gross; Gross ÷ 1.05 = Net. The VAT amount is always the difference between gross and net.
Worked Example
What is 100 plus VAT?
£100 net × 20% = £20.00 VAT → £120.00 gross
What is 165 plus VAT?
£165 net × 20% = £33.00 VAT → £198.00 gross
Adding VAT — B2B invoice:
A marketing agency quotes a client £4,500 net. The invoice must show the VAT-inclusive total.
£4,500 × 20% = £900.00 VAT → £5,400.00 gross
Removing VAT — retail receipt:
A business receipt shows £84.00 including 20% VAT. What is the net?
£84 ÷ 1.20 = £70.00 net • VAT = £14.00
Reduced rate (5%) — domestic energy:
A quarterly gas bill of £230 includes 5% VAT.
£230 ÷ 1.05 = £219.05 net • VAT (5%) = £10.95
Common Mistakes
- Subtracting 20% to remove VAT. £120 − 20% = £96, not £100. The correct method is £120 ÷ 1.20 = £100.
- Adding VAT twice. If a price is already VAT-inclusive, do not add VAT again. Use "Remove VAT" to verify first.
- Applying the wrong rate. Some goods qualify for the 5% reduced rate (domestic fuel, children's car seats) or 0% (most food, books).
Guide
How to Use
- 1
Select Add or Remove VAT
"Add VAT" for a net price that needs a gross total. "Remove VAT" to extract the net from a VAT-inclusive price.
- 2
Enter the amount
Type the price in pounds. The label shows which type you are entering.
- 3
Select the VAT rate
UK standard is 20%. Choose 5% for reduced rate goods, 0% for zero-rated, or enter a custom rate.
- 4
Review all three figures
Net, VAT amount, and gross are shown together. Copy them for invoices or records.
Next Steps
What to do next
Frequently Asked Questions
Related by Workflow
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Key differences
| Feature | VAT-exclusive (net) | VAT-inclusive (gross) |
|---|---|---|
| Also called | Net, ex-VAT, ex-tax | Gross, inc. VAT, with VAT |
| VAT included? | No | Yes |
| Used for | B2B invoices, wholesale | Consumer/retail pricing |
| 20% VAT example | £100 | £120 |
| Convert to other | × 1.20 to get gross | ÷ 1.20 to get net |
Worked example at 20%
Starting from the net (ex-VAT) price:
£100 (net) × 1.20 = £120 (gross) · VAT = £20
Starting from the gross (inc-VAT) price:
£120 (gross) ÷ 1.20 = £100 (net) · VAT = £20
Use this in your workflow
After calculating, copy the net/VAT/gross breakdown into your invoice template, bookkeeping spreadsheet, CRM, Slack, Notion or expense claim using the Copy result summary button.