How VAT is calculated
VAT (value added tax) is a percentage of the price, charged at each stage of the supply chain and passed on to the final customer. In most countries consumer prices include VAT. To add it, multiply the price by the rate. To remove it from a VAT-inclusive price, divide by one plus the rate.
Worked example
A £100 price with 20% VAT adds £20, so the customer pays £120. Starting from £120 and removing VAT, £120 ÷ 1.20 gives £100 and the VAT portion is £20. Notice that VAT is 16.67% of the £120 total, not 20%. That is why subtracting 20% from £120 would give the wrong answer of £96.
Standard VAT rates
EU member states set their own standard rate above a 15% minimum, and in 2026 the standard rates run from 17% in Luxembourg to 27% in Hungary. The United Kingdom charges 20%. The rates in the calculator are standard rates, so reduced rates for goods such as food or books are not filled in. Type a reduced rate into the rate box if one applies.
Selling online to customers in several EU countries can mean charging the rate of the customer's country, and the rules depend on your turnover and where you are based. This calculator does the arithmetic and is not tax advice. Check the current rules with your tax authority or an accountant.
Frequently asked questions
How do I add VAT to a price?
Multiply the price by one plus the VAT rate as a decimal. At 20%, multiply by 1.20, so £100 becomes £120.
How do I remove VAT from a price?
Divide the VAT-inclusive price by one plus the rate. £120 ÷ 1.20 = £100. Do not simply take 20% off the total.
What is the current standard VAT rate in the UK?
The standard rate is 20%. Reduced rates apply to some goods and services, such as domestic energy, and some items are zero-rated or exempt.
Do all EU countries charge the same VAT?
No. Each country sets its own rates, and standard rates range from 17% in Luxembourg to 27% in Hungary in 2026.