How much is 20% VAT in the UK?
- Price excl. VAT:
- £0.00
- VAT 20%
- £0.00
- Total incl. VAT:
- £0.00
Calculating VAT is a simple and quick operation that can be done in a few seconds. But not everyone knows how to add and subtract percentages for this. The mistakes that are made when calculating a VAT are always the same, although these are easy to avoid with the right formulas.
It is essential to clarify certain points, so as not to fall into avoidable mistakes when calculating the total amount of an account. These are the data to know in order to calculate the VAT correctly and simply.
How much is VAT in the UK?
Value Added Tax or VAT is a tax levied on the sale of goods or services. VAT is charged through the production and distribution chain, so that at the end of the chain, consumers are the ones who pay it.
To determine the VAT it is necessary to consider the selling price of the product or service offered, and also a specific percentage to obtain the final VAT cost. The percentage to be charged varies depending on the product or service in question. It also depends on the social demands of the countries involved.
The standard rates are usually imposed on the purchase of general goods and services, while the lower rates are usually for basic necessities or foodstuffs. For example, a smartphone may have a VAT of 20%, which would be the standard VAT;
How to calculate the VAT included?
In some stores or web portals you will see prices with the comment "VAT not included". This means that this is not the final price, and that to this price you will have to add the VAT cost to obtain the total to be paid.
The following formula should be used to calculate the VAT in this case:
That is, if you have a microphone worth £190 without VAT and with 20% VAT, the formula would look like this:
The price of the item should be multiplied by the VAT percentage, and that number divided by 100. In this case it would give £38. So the VAT amount would be £38.
Another alternative would be to divide 20% by 100, resulting in 0.2 and multiply this by the £190, resulting in £38 in the same way.
To finish, the £190 microphone price plus the calculated VAT must be added, giving a final result of £228.
How to calculate a price without VAT included?
The opposite situation can also arise, where you want to remove the VAT. This happens when on the price tag one is given, but with the comment that VAT is included. Knowing the net price of the product could be a totally valid question to have.
This can be answered by applying the formula of:
In this case the £228 total price of the microphone would be divided by 1.2. Resulting in the following: £190
The best formula for calculating VAT in the UK
In summary, if you have a VAT of 20%, these are the operations to perform:
- £190 x 0.2 = £38 (To calculate VAT on prices without VAT)
- £190 x 1.2 = £228 (To calculate the total price including VAT)
- £228 ÷ 1.2 = £190 (To calculate the price without VAT)
Although learning how to calculate the VAT is a great help, when dealing with more complex figures and needing maximum security in the results, a VAT calculator will be the best option to use.
Use our VAT calculator to get instant results and simplify your calculations even more. You don't need to complicate mathematical operations when you can do them in an automated way with this calculator.