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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