Question 1

How do I add VAT to a net price?

Accepted Answer

Multiply by (1 + rate as decimal). UK 20%: £100 net × 1.20 = £120 gross. The VAT amount is the difference: £20. For partial-VAT items (like UK reduced rate 5%), use 1.05; for zero-rated items, no multiplication needed.

Question 2

How do I remove VAT from a gross price?

Accepted Answer

Divide by (1 + rate as decimal). UK 20%: £120 gross ÷ 1.20 = £100 net. The VAT amount is the difference: £20. Common error: subtracting 20% directly (£120 − 20% = £96, wrong). The right operation is division, not subtraction, because VAT is a percentage of the net price, not the gross.

Question 3

What's the difference between VAT and GST?

Accepted Answer

Mechanically identical, both are consumption taxes applied at each stage of supply with credits for inputs. The naming is regional. UK and EU call it VAT; Australia, Canada, India, NZ, Singapore call it GST. The math is the same; the rates differ (UK standard 20%, AU standard 10%, NZ 15%, CA federal 5% + provincial layer).

Question 4

What does "zero-rated" mean?

Accepted Answer

Zero-rated supplies have a 0% VAT rate but are still taxable supplies, meaning the supplier can claim input VAT credits on related expenses. Different from "exempt," which means no VAT charged AND no input VAT credits. UK zero-rates most food, books, children's clothing, and exports. AU zero-rates basic food and exports. The distinction matters for input-tax recovery.

Question 5

How does VAT work on cross-border B2B sales?

Accepted Answer

For VAT-registered businesses in different EU countries: reverse charge applies. The supplier charges 0% VAT and the buyer self-accounts in their country. Both VAT IDs must be on the invoice. Post-Brexit, UK to EU is treated as export (zero-rated for goods; place-of-supply rules for services). Our country pages have detail on each jurisdiction's rules.

Question 6

Why are some items reduced-rate?

Accepted Answer

Most VAT systems apply reduced rates to essentials like food, energy, books, and some healthcare products to reduce regressive impact on lower-income consumers. The exact items at reduced rates vary by country, UK reduced rate (5%) covers domestic energy and children's car seats; many EU countries apply reduced rates to restaurants and cultural admissions. Check your country's revenue authority for the current list.

Question 7

How accurate is this calculator?

Accepted Answer

The math is exact (modulo standard floating-point rounding to 2 decimals). The country rates reflect April 2026 standard rates: verify current rates at HMRC, your local revenue authority, or your accountant before using for legal/tax purposes. Some countries adjust rates frequently; the calculator is a reference, not legal advice.

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