Remove VAT Calculator
Many everyday business situations require you to work backwards from a VAT-inclusive price to find the original net amount. This is sometimes called reverse VAT, extracting VAT, or backing out VAT. Common use cases include reclaiming VAT on business expenses, comparing supplier quotes where some prices include VAT and others exclude it, calculating the cost base for accounting entries, and verifying that a supplier has charged the correct amount.
The key to removing VAT correctly is to divide — not subtract. To remove 20% VAT from a gross price, you divide by 1.20, not subtract 20% of the gross. This matters because VAT was added on top of 100% of the net to reach 120%. Subtracting 20% of £120 gives £96, while dividing by 1.20 correctly returns £100. The error might seem small on individual transactions but compounds significantly across a month of expenses or a large invoice. This calculator applies the correct formula automatically for any rate.
Enter the gross (VAT-inclusive) amount and select your VAT rate. The calculator shows the net amount (excluding VAT) and the exact VAT component within the price. This works for any rate: UK standard 20%, UK reduced 5%, German 19%, French 20%, Australian GST 10%, New Zealand GST 15%, or a custom rate you define. The breakdown is shown immediately, making it easy to verify the split against a supplier invoice or receipt.
Formula
Net Amount = Gross Amount ÷ (1 + VAT Rate ÷ 100) VAT Amount = Gross Amount − Net Amount
To find the net price, divide the gross (VAT-inclusive) amount by 1 plus the VAT rate as a decimal. For a 20% rate, divide by 1.20. The difference between gross and net is the VAT amount.
Worked Examples
Frequently Asked Questions
How do I remove VAT from a price?▾
Divide the gross price by (1 + VAT rate as a decimal). For a 20% VAT rate, divide by 1.20. For example, £120 ÷ 1.20 = £100 net price. The VAT amount is the difference: £120 − £100 = £20.
Why can't I just subtract the percentage?▾
VAT is added on top of the net price, so the gross price is 120% of the net (for a 20% rate). Subtracting 20% of the gross gives the wrong answer because you would be taking 20% of 120%, not 20% of 100%. You must divide, not subtract, to correctly reverse the VAT calculation.
What does 'reverse VAT' mean, and when do I need it?▾
Reverse VAT — also called extracting VAT or backing out VAT — means finding the net (pre-tax) amount from a VAT-inclusive price. You need this when reclaiming VAT on business expenses, when a price is quoted inclusive of VAT but you need to record the net cost in your accounts, or when comparing prices where some include VAT and others do not.
Does the gross-to-net formula work the same for all VAT rates?▾
Yes — the formula structure is always the same: divide the gross price by (1 + VAT rate as a decimal). For 20% VAT, divide by 1.20. For 5% VAT, divide by 1.05. For 25% VAT (Sweden), divide by 1.25. The denominator changes with the rate; the logic stays the same. This calculator applies the correct denominator automatically.
Is the remove VAT formula the same for all countries?▾
The formula structure is the same — divide by (1 + rate). Only the rate changes by country: 20% for the UK, 19% for Germany, 10% for Australia GST, 15% for New Zealand GST, and so on. Select your country from the preset list or enter a custom rate for any jurisdiction.
Can I reclaim the VAT I paid on business purchases?▾
As a VAT-registered business, you can generally reclaim VAT on purchases made for business purposes. However, some categories are blocked — most notably cars for mixed use, client entertainment, and items used for both business and personal purposes. Consult HMRC guidance or a tax adviser to confirm what you can reclaim in your specific situation.
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All calculations are for informational purposes only. They should not replace professional financial, tax, or legal advice. Always consult a qualified professional for decisions affecting your finances or business.