How to add or remove VAT
- Choose Add VAT to go from a net price (ex VAT) to the gross price, or Remove VAT to find the net price inside a VAT-inclusive one.
- Enter the Price. The VAT rate starts at 20%; tap 5% or 0% for the UK reduced and zero rates, or type any other rate.
- Read the result with the VAT amount shown on its own line, ready for an invoice or expense claim.
Net, gross and the VAT amount
Net is the price before VAT, gross is the price with VAT included, and the difference is the VAT amount. Prices for consumers in the UK and the EU are shown gross: the price on a shelf or a menu already includes VAT. Prices between businesses are usually quoted net, because VAT-registered businesses can generally reclaim the VAT they pay on purchases.
That’s why both directions come up. A freelancer adds VAT to their net day rate to write an invoice. A business owner removes VAT from a receipt to record the cost and the reclaimable VAT separately.
Quick reference at 20%
| Net (ex VAT) | VAT | Gross (inc VAT) |
|---|---|---|
| 10.00 | 2.00 | 12.00 |
| 49.99 | 10.00 | 59.99 |
| 100.00 | 20.00 | 120.00 |
| 250.00 | 50.00 | 300.00 |
| 1,000.00 | 200.00 | 1,200.00 |
To check a total on an invoice, add the net and the VAT and make sure they match the gross. Rounding the VAT to two decimal places can leave a difference of a penny on large orders with many lines.