Welcome to this online VAT calculator
We have created this online VAT calculator to allow you to quickly add or remove VAT from an amount. Simply enter a value below for your amount and the current VAT rate.
For example the standard VAT rate in the UK is currently 20%. In South Africa the standard VAT rate is 15%. Then click Add or Remove VAT.
Please click here for a list of standard VAT rates in different countries.
How do you Add VAT to a value?
To calculate the amount of VAT to add to a value you can use the following formula:
VAT amount = original value x (VAT rate / 100)
For example, if you have an original value of £100 and a VAT rate of 20%, the calculation would be:
VAT amount = £100 x (20 / 100) = £20
So the final price with VAT would be £100 + £20 = £120
You can also use the following formula to add VAT to the value and get the final price at once:
Final price = original value + (original value x (VAT rate / 100))
Final price = £100 + (£100 x (20 / 100)) = £100 + £20 = £120
How do you remove VAT from a value?
To calculate the original value before VAT was added, you can use the following formula:
original value = final price / (1 + (VAT rate / 100))
For example, if the final price with VAT is £120 and the VAT rate is 20%, the calculation would be:
Original value = £120 / (1 + (20 / 100)) = £120 / 1.2 = £100
This means that the original value before VAT was added was £100.
Alternatively, you can use the following formula to remove VAT from the final price and get the original value
Original value = Final price – (final price x (VAT rate / 100))
Original value = £120 – (£120 x (20 / 100)) = £120 – £24 = £96
What is VAT anyway?
Value-added tax (VAT) is a consumption tax that is placed on goods and services, and is typically added to the price of the product or service at the point of sale. The tax is generally collected and remitted to the government by the business that is selling the goods or services.
In most countries, VAT is a form of indirect tax, which means that the tax is collected by the business and then remitted to the government, rather than being paid directly by the consumer. This allows businesses to recover the cost of the tax through the prices they charge for their goods and services.
One of the main benefits of VAT is that it is a relatively simple tax to administer, since it is typically collected at the point of sale and can be easily integrated into a business’s accounting systems. Additionally, because VAT is an indirect tax, it is less likely to be evaded by consumers than a direct tax, such as an income tax.
However, VAT can be a significant cost for businesses, especially small businesses, since they must bear the administrative burden of collecting and remitting the tax. Additionally, VAT can be a regressive tax, since it can disproportionately affect low-income individuals, who may spend a larger portion of their income on VAT-taxable goods and services.
There are multiple rates in VAT, standard rate is mostly around 20% but some goods like basic food, book, medication are often taxed at a reduced rate and some goods like financial services or international transport are zero-rated.
In summary, VAT is a consumption tax that is placed on goods and services and is collected and remitted to the government by the business that is selling the goods or services. While it can be a relatively simple tax to administer, it can also be a significant cost for businesses and can disproportionately affect low-income individuals.