Remove VAT with VAT calculator

(See practical example)
ID VAT Inclusive Price VAT rate% VAT excluded Price
0 £0.00 0% £0.00 £0.00

To add VAT, click here.

Calculation history
ID VAT Inclusive Price VAT rate% VAT excluded Price
0 £0.00 0% £0.00 £0.00
How to remove VAT from a product?

Calculate price without VAT

If you want to calculate a price without VAT, it is done as follows:

Based on the example of the smartphone , this time you want to know the price without VAT of the product. When reviewing the purchase, the total value was £1,200.00 (including 20% VAT). The procedure is the next:

20% is divided by 100% = 0.20

The next step is to divide the total amount by "1" plus the rate (1 + 0.20) which is equal to 1.20.

This is reflected as:

The price without VAT is: 1,000.00 pounds

To know the VAT = total - price without VAT

The VAT value you paid is £200.00.

Who has to account for and calculate VAT?

As mentioned above, the final consumer should pay the VAT. In the event that a good is sold and then re-sold, the net impact of VAT may be zero or reduced, but the final consumer will pay the net VAT incurred at each point in the transaction.

Companies account for VAT based on the value of their purchases and sales. Therefore, a company, or a self-employed person, may pay VAT or receive a refund of VAT, depending on their activity levels for the given period.

Dr. Cr.
Purchases and expenses Sales and income
Input VAT (VAT to pay) VAT Charged (VAT to refund)

How to calculate VAT?

Here is a practical example of how to calculate the VAT percentage by applying some formulas:

Manufacturer: Tom
Store: Jerry
The final consumer: Walt
Product: Cheese

Tom makes 1 kg of cheese and wants to sell it for 2.72 pounds. In addition to the sale price, Jerry must also pay a percentage of this price. In this case, if the general VAT is 20% Tom will have to charge Jerry £3.26 for the cheese.

Glossary: Taxable base

The price without VAT of 2.72 pounds, in this case, is the tax base on which the percentage of VAT required can be added, depending on the type of good or product.

It is easier to calculate VAT with a calculator as 1+ the VAT percentage, in this case 1 + 0.20 = 1.20 and we multiply the tax base, 2.72 pounds. That calculation is faster and is the same result.

How to remove 20% VAT from a total amount?

If Tom sells cheese for £3.26 to Jerry, how do we know how much is the VAT and the tax base?

We return to the previous example:

Tom sells cheese to Jerry for £3.26, Jerry is going to sell it at his store for £5.60 (total price) and Walt wants to buy it.

Company / Consumer VAT Charged - Input VAT = VAT to register
Jerry: Maker £0.54 £00.00 £0.54
Tom: Store £0.93 £0.54 £0.39
Walt: Consumer £00,00 £0.93 £0.93

*Tom & Jerry are commercial entities. For this, the VAT is what they will have to enter into the HM Revenue & Customs.

** Walt is the end consumer. It would be too difficult for the Tax Agency to collect information on the VAT for each individual, so he does not pay anything to HM Revenue & Customs. Instead, he pays it to the most recent seller, Jerry.

Therefore, HM Revenue & Customs collects the final VAT paid by Walt of £0.93, collecting £0.54 from Tom and £0.39 from Jerry for his returns, which can be quarterly or monthly.