Reverse VAT Calculator

If a price already includes VAT and you want to know what it was before tax, you need to work backwards from the total. You cannot just take the VAT percentage off the final price and expect to get the original amount.

This Reverse VAT Calculator breaks a VAT-inclusive price into the amount before VAT and the VAT included in the total. Enter the gross price and the VAT rate to see both figures. It can be useful when checking an invoice, looking over a receipt, working out VAT on a business purchase, or checking a selling price that already includes VAT.

For example, with 20% VAT, you divide the total by 1.20 to find the price before VAT. The VAT is then the difference between the original total and that amount. If a different VAT rate was used, you can follow the same process with the appropriate divisor.

How the Reverse VAT Calculator Works

Using the calculator is simple:

  • Enter the total price including VAT.
  • Enter the VAT rate that was used.
  • Divide the total by 1 plus the VAT rate as a decimal.
  • Subtract the net price from the total to find the VAT.
  • Check the net price, VAT amount, and gross price.

should be the same rate that was applied to the transaction.

For example, suppose an invoice shows £240 including 20% VAT.

£240 ÷ 1.20 = £200

So the price before VAT was £200.

The VAT included in the £240 total was:

£240 − £200 = £40

You will not get the right answer by simply taking 20% off £240. The 20% was added to the £200 price before VAT, rather than calculated from the final £240.

The general formulas are:

Net price = Gross price ÷ (1 + VAT rate ÷ 100)

VAT amount = Gross price − Net price

The rate you enter

Formula for Removing VAT from a Gross Price

When VAT is already included in a price, the total contains both the original price and the VAT. This is why you divide the gross amount instead of simply subtracting the VAT percentage.

For 20% VAT, the calculation is:

Net price = Gross price ÷ 1.20

Then:

VAT amount = Gross price − Net price

For example, if the gross price is £240:

£240 ÷ 1.20 = £200

The VAT is:

£240 − £200 = £40

You can use the same approach for other VAT rates. With 5% VAT, for example, you would divide the gross amount by 1.05.

Common VAT-Inclusive Amounts Converted to Net

The examples below show how VAT-inclusive prices break down when 20% VAT applies.

Gross Price Including VATNet Price Before VATVAT Included
£60£50£10
£120£100£20
£180£150£30
£240£200£40
£300£250£50
£600£500£100
£1,200£1,000£200

At 20% VAT, dividing the gross amount by 1.20 gives you the price before VAT. The VAT is simply the difference between the gross and net amounts.

If a different VAT rate was used, the divisor changes too. For example, 5% VAT uses 1.05 rather than 1.20.

Taking VAT Off on a Standard Calculator

You can work out reverse VAT with any basic calculator. All you need is the VAT-inclusive price and the rate that was used.

For 20% VAT:

1 + 20 ÷ 100 = 1.20

Then divide the gross price by 1.20.

For example, if the total is £360:

£360 ÷ 1.20 = £300

That gives you the price before VAT.

To find the VAT:

£360 − £300 = £60

A common mistake is multiplying £360 by 0.80. That takes 20% off the gross price, but it does not undo a 20% VAT charge. Since the VAT was added to the net price, you need to divide the gross amount to work back to the original figure.

FAQs

When a price includes 20% VAT, the VAT makes up one-sixth of the final price.

The original price represents 100%, and the VAT adds another 20%, bringing the total to 120%. So the VAT is 20 out of 120 parts, which works out to one-sixth.

For a £120 total:

£120 ÷ 6 = £20 VAT

The remaining £100 is the price before VAT.

This shortcut is only for prices that include 20% VAT.

Yes. The process is the same, but you use 1.05 instead of 1.20.

For example:

£105 ÷ 1.05 = £100

The VAT included in the £105 total is:

£105 − £100 = £5

No, not accurately. You need to know the VAT rate used for the transaction before you can separate the gross amount into the net price and VAT.

For example, a £120 total would give you different net amounts depending on the VAT rate. If the rate is not clear on the invoice or receipt, check the transaction details before doing the calculation.

Use the VAT-inclusive amount shown on the invoice together with the rate that applies to the transaction.

Rounding can sometimes cause a small difference between your calculation and the VAT figure shown on an invoice, especially when several lines are involved. If you are using the result for accounting or tax records, follow the figures and rounding method used for that transaction.

Yes, if you know which part of the total is subject to that VAT rate.

Take that VAT-inclusive amount separately and divide it by 1 plus the applicable VAT rate. If the total contains items with different VAT rates or treatments, applying one rate to the whole amount can give you the wrong result.

Because the VAT percentage was calculated from the price before VAT, not from the final total.

For example, £120 including 20% VAT contains £100 net price and £20 VAT. If you simply remove 20% from £120:

£120 × 0.80 = £96

That is not the original price.

The correct calculation is:

£120 ÷ 1.20 = £100

So £100 is the net price and £20 is the VAT.

Final Thoughts

Reverse VAT is simply a way of working backwards from a price that already includes VAT. Divide the gross amount by 1 plus the applicable VAT rate to find the price before VAT, then subtract that amount from the total to find the VAT.

For 20% VAT, dividing by 1.20 is the quickest way to separate the two amounts. For other rates, change the divisor to match the VAT rate used.

This can be useful when checking invoices, receipts, business purchases, quotes, and prices that already include VAT. If the transaction includes different VAT rates, discounts, rounding, or other VAT treatment, check the transaction details before relying on the calculated figures.