This VAT from gross calculator allows you to extract the net price and VAT amount from a VAT-inclusive total. It is essential for ecommerce sellers, accountants, and business owners who work with prices that already include VAT.
Many people incorrectly try to subtract VAT directly from a total. This leads to errors because VAT is calculated as a percentage of the net value, not the gross. The correct method is to reverse the VAT using division, which this calculator performs instantly.
Use this tool to validate invoices, analyse revenue, and ensure your pricing remains accurate and compliant with UK VAT rules.
The calculator breaks down a VAT-inclusive price into two parts: the net value (your actual revenue) and the VAT amount (the tax included in the price).
This is critical for financial accuracy. If you treat the gross amount as revenue, you will overestimate your earnings and miscalculate profit.
Net = Gross ÷ (1 + rate ÷ 100)
VAT = Gross − Net
This method correctly reverses VAT because the tax is applied to the net amount. Simply subtracting a percentage from the total would produce incorrect results.
Understanding VAT from gross is essential for businesses selling through marketplaces or platforms where prices are VAT-inclusive. If you fail to extract VAT correctly, your profit calculations will be inaccurate.
For example, if you receive £120 from a sale, your actual revenue is only £100 at a 20% VAT rate. The remaining £20 belongs to HMRC. If you then deduct fees and costs from the full £120, you will overestimate your margin.
This calculator helps you isolate true revenue before making pricing, advertising, or business decisions.
Example 1:
£120 at 20% VAT → £100 net + £20 VAT
Example 2:
£55 at 5% VAT → £52.38 net + £2.62 VAT
Divide by (1 + VAT rate), then subtract to get VAT.
Because VAT is calculated from the net amount, not the total.
The standard rate is 20%.