For an invoice
Several lines, VAT per rate
Each line has its own rate; the summary works out the VAT per rate from the net total. HMRC also allows rounding line by line, as long as you do it consistently (VAT Notice 700, 17.5.1).
| Description | Quantity | Unit price ex. VAT | Rate | Net | Remove |
|---|---|---|---|---|---|
| £9.12 | |||||
| £12.12 | |||||
| £64.99 | |||||
| £18.90 |
The table carries on to the right: scroll it sideways.
No lines yet. Add the first one with the button below.
| Rate | Net | VAT |
|---|---|---|
| 20% | £21.24 | £4.25 |
| 5% | £64.99 | £3.25 |
| 0% | £18.90 | £0.00 |
| Total | £105.13 | £7.50 |
| Amount due | £112.63 | |
Issue an invoice like this in Lucanto, free
Choose the VAT rate on each line, and Lucanto adds up the net amount and the VAT for each rate. A new line starts at 20%. On the Free plan, one-off invoices are unlimited.
Which VAT rate applies?
Type what you sell. The list is a guide to common cases, not a ruling: the reduced rate is set by Schedule 7A of the VAT Act 1994, the zero rate by Schedule 8 and exemptions by Schedule 9. Exempt is not the same as zero-rated.
- 20%Most goods and servicesThe standard rate applies unless a supply is reduced-rated, zero-rated or exempt
VATA 1994 s. 2(1)
- 0%FoodExcept catering, confectionery, crisps, roasted or salted nuts, ice cream, alcoholic and soft drinks (including fruit juice and bottled water) and pet food, which are standard-rated
VATA 1994 Sch 8 Group 1
- 20%Restaurant and café meals (catering)Catering is standard-rated, including hot food to take away
VATA 1994 Sch 8 Group 1, Note (3)
- 20%Hot takeaway food and drinkCold takeaway food is zero-rated, unless it is of a type that is always standard-rated, such as crisps, sweets or bottled water
VATA 1994 Sch 8 Group 1, Note (3)(b); VAT Notice 709/1
- 20%Alcoholic drinks
VATA 1994 Sch 8 Group 1 (excepted items)
- 20%Soft drinks, fruit juice and bottled waterTea, coffee, cocoa and milk are zero-rated, except as catering
VATA 1994 Sch 8 Group 1 (excepted items)
- 20%Confectionery, chocolate and sweetsIncludes biscuits wholly or partly covered with chocolate. Cakes, and biscuits not covered with chocolate, are zero-rated
VATA 1994 Sch 8 Group 1 (excepted items), Note (5)
- 20%Crisps, roasted or salted nuts
VATA 1994 Sch 8 Group 1 (excepted items)
- 20%Ice cream
VATA 1994 Sch 8 Group 1 (excepted items)
- 20%Pet food
VATA 1994 Sch 8 Group 1 (excepted items)
- 0%Books, newspapers and magazines, also as e-publicationsNot if wholly or predominantly devoted to advertising; e-publications also not if wholly or predominantly audio or video
VATA 1994 Sch 8 Group 3
- 0%Children's clothing and footwearDesigned for young children and not suitable for older people. Not clothing made of fur
VATA 1994 Sch 8 Group 16 item 1
- 0%Prescription medicines and aids for disabled peopleMedicines dispensed by a pharmacist on prescription; aids such as wheelchairs, adjustable beds and stairlifts supplied to a disabled person for domestic or personal use
VATA 1994 Sch 8 Group 12
- 0%Women's sanitary productsNot incontinence products
VATA 1994 Sch 8 Group 19
- 5%Domestic gas, heating oil and solid fuelFor qualifying use: domestic use, or non-business use by a charity. Domestic electricity in Great Britain: 0% until 30 June 2027
VATA 1994 Sch 7A Group 1
- 0% until 30 June 2027Domestic electricity in Great BritainEngland, Wales and Scotland, for qualifying use only: domestic use, or non-business use by a charity. Supplies of up to 1,000 kWh a month count as domestic. Northern Ireland: 5%. Business use above that: 20%. HMRC guidance sets the end date at 30 June 2027, extended from 31 March 2027; as of 29 October 2026 the order that makes the extension law is still to be made
SI 2026/987 (VATA 1994 Sch 8 Group 24); VAT Notice 701/19
- 0% until 31 March 2027, then 5%Installation of energy-saving materialsIn Great Britain and Northern Ireland. From 1 April 2027 the reduced rate applies
VATA 1994 Sch 8 Group 23
- 5%Children's car seats
VATA 1994 Sch 7A Group 5
- 5%Residential conversions and renovation of empty homesRenovation only where the home has been empty for at least 2 years
VATA 1994 Sch 7A Groups 6 and 7
- 0%New homesThe first sale by the builder, and building work on a new dwelling. Not the services of architects, surveyors or consultants
VATA 1994 Sch 8 Group 5
- 5%Smoking cessation productsProducts designed to help people stop smoking tobacco, such as nicotine patches and gum
VATA 1994 Sch 7A Group 11
- 5%Contraceptive productsOther than exempt supplies
VATA 1994 Sch 7A Group 8
- 5%Installation of mobility aids for people aged 60 or overIn the home of the person who uses them
VATA 1994 Sch 7A Group 10
- 5%Welfare advice or informationFrom a charity or a regulated welfare institution
VATA 1994 Sch 7A Group 9
- 0%Export of goodsOnly where HMRC’s conditions are met. Services to overseas customers are not automatically zero-rated: many are standard-rated, and others are outside the scope of UK VAT
VATA 1994 s. 30(6)
- 0%Passenger transport in a vehicle for 10 or more passengersA vehicle designed or adapted to carry at least 10 passengers, and scheduled flights
VATA 1994 Sch 8 Group 8 item 4
- 20%Private school feesSince 1 January 2025. Not for teaching English as a foreign language, nursery classes or higher education courses
VATA 1994 Sch 9 Part 3 item 1 (Finance Act 2025 s. 47)
- exemptInsurance
VATA 1994 Sch 9 Group 2
- exemptFinance and financial services
VATA 1994 Sch 9 Group 5
- exemptEducationPrivate school fees have been standard-rated since 1 January 2025
VATA 1994 Sch 9 Group 6
- exemptHealth and welfare
VATA 1994 Sch 9 Group 7
- exemptLand and buildings (sales and lettings)With exceptions: new homes, for example, are zero-rated
VATA 1994 Sch 9 Group 1
- exemptSport, sports competitions and physical educationOnly some supplies, on the conditions the law sets
VATA 1994 Sch 9 Group 10
- exemptBurial and cremation
VATA 1994 Sch 9 Group 8
Not in this list. Check the GOV.UK guide first: VAT rates on different goods and services. Only taxable goods and services that are not reduced-rated, zero-rated or exempt are standard-rated at 20%.
UK VAT rates and when they changed
| From | What changed | Legislation |
|---|---|---|
| Temporary zero rate for domestic electricity in Great Britain ends, and electricity returns to the reduced rate of 5%.As of | VAT Notice 701/19; SI 2026/987 | |
| Temporary zero rate for the installation of energy-saving materials ends, and the reduced rate of 5% applies.As of | VATA 1994 Sch 7A Group 2 (SI 2023/376) | |
| Temporary zero rate for domestic electricity in Great Britain, until 30 June 2027 (first set to end on 31 March 2027). Northern Ireland stays at 5%. | SI 2026/987; VAT Notice 701/19 | |
| Temporary reduced rate of 5% for children’s meals in restaurants and for family attractions, until 1 September 2026. | SI 2026/576 | |
| Registration threshold £90,000, deregistration threshold £88,000. | SI 2024/307 | |
| Standard rate up from 17.5% to 20%. | Finance (No. 2) Act 2010 s. 3 |
The rate that applies depends on when the supply is made: the 20% standard rate applies to supplies made on or after 4 January 2011 (Finance (No. 2) Act 2010 s. 3), and the temporary zero rate for domestic electricity in Great Britain to supplies made from 1 October 2026 to 30 June 2027 (SI 2026/987, with the end date HMRC guidance gives after the extension from 31 March 2027); in Northern Ireland, domestic electricity stays at 5%. Where a bill covers a period that spans 1 October 2026, HMRC lets suppliers in Great Britain base the VAT on the date the electricity was used (Revenue and Customs Brief 10 (2026)).
How to work out VAT
A VAT invoice works with three figures: the VAT-exclusive (net) price, the VAT, and the VAT-inclusive (gross) price. HMRC says VAT is normally worked out as a percentage of a price set without VAT; sometimes it has to be worked out from a price that already includes it (VAT Notice 700, 7.3.1).
Add VAT to a net price
VAT = net price × rate, rounded to the penny, and the VAT-inclusive price is the net price plus the VAT. At 20%, that is the same as multiplying the net price by 1.2; at 5%, by 1.05. £100.00 plus VAT at 20% is £120.00, of which £20.00 is VAT; at 5% it is £105.00, with £5.00 of VAT.
Remove VAT from a VAT-inclusive price
Divide the VAT-inclusive price by 1.2 at 20%, or by 1.05 at 5%, to get the net price. The VAT itself is the VAT fraction of the price: rate ÷ (100 + rate), which is 1/6 at 20% and 1/21 at 5% (VAT Notice 700, 7.3.1). So a VAT-inclusive price of £120.00 includes £20.00 VAT and £100.00 net; £105.00 at 5% includes £5.00 VAT. HMRC gives its own example: a VAT-inclusive price of £2.40 includes £0.40 VAT, which is one-sixth of £2.40, not 20% of it.
A common mistake: taking 20% of the VAT-inclusive price. £120.00 × 20% = £24.00, but the VAT in £120.00 is £20.00: the rate applies to the net price, not to a price that already includes VAT.
At 0%
At 0% there is no VAT to take out, so there is nothing to divide: the net price is the whole price, and the calculator shows no VAT fraction.
When you only know the VAT
Net = VAT × 100 ÷ rate. The result is only approximate: the VAT has already been rounded to the penny, so the real net amount can be a penny or two out.
Excel formulas
The formulas assume the amount is in cell A1 and the rate is 20%. At 5%, divide by 21 instead of 6 and use 5% instead of 20%.
- VAT in a VAT-inclusive price
=ROUND(A1/6,2)- Net from a VAT-inclusive price
=A1-ROUND(A1/6,2)- VAT on a net price
=ROUND(A1*20%,2)
Why VAT can differ by a penny
HMRC allows you to work out the VAT on an invoice line by line or once on the total. Line VAT may be rounded down to the nearest 0.1p, or to the nearest 1p or 0.5p, and the total VAT may then be rounded down to a whole penny; whichever you choose, you must be consistent (VAT Notice 700, 17.5 and 17.5.1). The law does not prescribe a method. Ten lines of £0.07 at 20% show how far apart the two can be: rounded line by line to the nearest penny, each line carries £0.01 of VAT and the invoice £0.10; worked out on the £0.70 total, the VAT is £0.14.
This calculator rounds to the nearest penny and rounds half a penny up. That is the calculator’s own convention; HMRC gives no rule for an exact half penny. The invoice summary above works out VAT per rate from the net total, as an invoice in Lucanto does, and shows the line-by-line total next to it, so you can see both and use whichever one you apply consistently.
HMRC guidance also lets invoice traders round the total VAT on an invoice down to a whole penny and ignore any fraction of a penny, where the VAT charged to customers is the same as the VAT paid to HMRC (VAT Notice 700, 17.5). Retailers must not round VAT down; they may round each VAT calculation up or down (17.6). At 20%, a VAT-inclusive price of £0.99 includes exactly £0.165 VAT. This calculator shows £0.17; rounded down, it would be £0.16.
Public-sector contracting authorities must accept and process electronic invoices that comply with BS EN 16931-1:2017 (Procurement Act 2023 s. 67, in force since 24 February 2025). That standard has VAT only per rate, not per line: e-invoice validators check that the VAT for each rate is its net total times the rate, rounded to two decimals (rule BR‑CO‑17), and accept a difference of less than one pound.
Zero-rated, exempt or outside the scope
Zero-rated and exempt supplies both carry no VAT, but they are not the same. Zero-rated supplies are listed in Schedule 8 of the VAT Act 1994 and exempt ones in Schedule 9. A business making zero-rated supplies can still reclaim the VAT on its own purchases (input tax); a business making exempt supplies cannot.
If a VAT invoice includes exempt supplies, it must show them as a separate total and show clearly that no VAT is payable on them (VAT Notice 700, 16.5). For zero-rated supplies, you do not have to issue a VAT invoice at all (16.2.1).
Services you supply to a business customer abroad are mostly outside the scope of UK VAT, rather than zero-rated: when the place of supply is outside the UK, there is no UK VAT on them (VAT Notice 700, 4.8.1). Exports of goods, on the other hand, are zero-rated, provided you meet the conditions HMRC sets (VAT Act 1994 s. 30(6)).
When there is no VAT on the invoice
Not VAT-registered
The VAT registration threshold is £90,000 as of 29 October 2026 (VAT Act 1994 Sch 1 para 1). You must register when your taxable turnover for the last 12 months goes over it, or if you expect to go over it in the next 30 days alone. The deregistration threshold is £88,000; both have applied since 1 April 2024. Only a VAT-registered person can issue a VAT invoice, and there are financial penalties for issuing one without being registered (VAT Notice 700, 19.5.1).
Reverse charge
For building and construction services reported under the Construction Industry Scheme (CIS), where supplier and customer are both VAT-registered in the UK and the supply is standard-rated or reduced-rated, the customer accounts for the VAT. The invoice must refer to the reverse charge (VAT Regulations 1995, regulation 14(1)(o)); the exact wording is not set in law, and HMRC gives examples such as “reverse charge: VAT Act 1994 Section 55A applies” or “reverse charge: Customer to pay the VAT to HMRC”. Show the reverse-charge VAT on the invoice, but leave it out of the total VAT charged (VATREVCON37100). For services you buy from abroad, you account for the VAT yourself under the reverse charge (VAT Notice 700, 5.4).
Foreign currency
On a VAT invoice in a foreign currency, the amounts excluding VAT can be in any currency, but the total VAT must be shown in sterling (VAT Regulations 1995, regulation 14(1)(l); VAT Notice 700, 16.3.1 and 16.4). To convert, you can use the UK market selling rate at the time of supply, HMRC’s period rates of exchange, or a commercial rate HMRC has approved. Section 7.6 of VAT Notice 700, which has the force of law, sets out these options.
E-invoicing
Today, the only legal duty is on the public sector: contracting authorities must accept and process e-invoices that comply with BS EN 16931-1:2017 (Procurement Act 2023 s. 67, since 24 February 2025). Between businesses, an electronic VAT invoice, a PDF sent by email for example, is valid if it carries the same details as a paper one (VAT Notice 700, 17.7). Under the government’s published roadmap, VAT-registered businesses will have to be able to issue and receive e-invoices from 1 April 2029, with limited exemptions expected; the detailed requirements are due between October 2027 and April 2028. The UK does not currently have a single mandated e-invoicing standard.
Frequently asked questions about VAT
How do I remove VAT from a price?
Divide the VAT-inclusive price by 1.2 at 20%, or by 1.05 at 5%, and round to the penny: that is the net price. The VAT is the difference, which is the same as the price times the VAT fraction: 1/6 at 20%, 1/21 at 5% (VAT Notice 700, 7.3.1). £120.00 including VAT is £100.00 net plus £20.00 of VAT; £105.00 at 5% is £100.00 plus £5.00. Taking 20% off the VAT-inclusive price does not give the net price: £120.00 × 20% = £24.00.
How do I add VAT to a price?
Multiply the net price by the rate, round the VAT to the penny and add it to the net price. At 20%, that is the same as multiplying by 1.2. £100.00 plus VAT at 20% is £120.00, with £20.00 of VAT; at 5% it is £105.00, with £5.00 of VAT.
What is the VAT fraction?
It is HMRC’s name for the share of a VAT-inclusive price that is VAT: rate ÷ (100 + rate). At 20% it is 20/120, which is 1/6; at 5% it is 1/21 (VAT Notice 700, 7.3.1). HMRC’s own example: a VAT-inclusive price of £2.40 includes £0.40 VAT, which is one-sixth of £2.40, not 20% of it.
What are the UK VAT rates in 2026?
Three rates: the standard rate of 20% (VAT Act 1994 s. 2(1)), in force since 4 January 2011; the reduced rate of 5% (Schedule 7A); and the zero rate of 0% (Schedule 8). Some supplies are exempt instead (Schedule 9). Domestic electricity in Great Britain is temporarily zero-rated from 1 October 2026 to 30 June 2027, while in Northern Ireland it stays at 5% (SI 2026/987; VAT Notice 701/19). Rates as of 29 October 2026.
Is there VAT on food?
Most food for human consumption is zero-rated (VAT Act 1994 Sch 8 Group 1), but there are exceptions at the standard rate of 20%: catering, which includes restaurant and café meals and hot takeaway food, as well as ice cream, confectionery, alcoholic drinks, other drinks such as fruit juice and bottled water, crisps, roasted or salted nuts and pet food. Tea, coffee, cocoa and milk are zero-rated as goods. Biscuits wholly or partly covered in chocolate are standard-rated; other cakes and biscuits are zero-rated. Cold takeaway food is zero-rated, unless it is of a type that is always standard-rated.
What is the VAT rate on electricity from 1 October 2026?
Domestic electricity in Great Britain (England, Wales and Scotland) is zero-rated from 1 October 2026 to 30 June 2027 (SI 2026/987; VAT Notice 701/19). In Northern Ireland, it stays at the reduced rate of 5%. The order that extends the original end date of 31 March 2027 is still to be made, so check the position before you invoice supplies made after 31 March 2027. The zero rate covers qualifying use only: domestic use, or use by a charity other than in the course of a business, and a supply of up to 1,000 kWh a month counts as domestic. Business use above that is standard-rated at 20%. Gas and other fuels are not affected and stay at 5% for qualifying use.
What is the difference between zero-rated and exempt?
Neither carries VAT, but a business making zero-rated supplies can reclaim the VAT on its costs, and one making exempt supplies cannot. Zero-rated supplies are listed in Schedule 8 of the VAT Act 1994 (for example most food, books and children’s clothing), exempt ones in Schedule 9 (for example insurance, financial services, education and health care; private school fees, though, have been standard-rated since 1 January 2025). On a VAT invoice, exempt supplies need a separate total and must show clearly that no VAT is payable (VAT Notice 700, 16.5).
Can I charge VAT if I am not VAT-registered?
Not on a VAT invoice: only a VAT-registered person can issue one, and there are financial penalties for issuing one without being registered (VAT Notice 700, 19.5.1). You must register once your taxable turnover goes over the threshold, which is £90,000 as of 29 October 2026 (VAT Act 1994 Sch 1 para 1).
Should VAT be rounded per line or per invoice?
Either, as long as you are consistent: HMRC allows VAT to be worked out line by line or on the invoice total (VAT Notice 700, 17.5 and 17.5.1), and the law prescribes no method. Invoice traders may round the total VAT down to a whole penny (17.5); retailers must not round VAT down (17.6). The two methods can differ: ten lines of £0.07 at 20% come to £0.10 of VAT line by line and £0.14 on the total. This calculator works out VAT per rate from the net total and rounds half a penny up.
What is a reverse VAT calculator?
A calculator that works backwards from a VAT-inclusive price to the net price and the VAT in it. This one does that under “Price including VAT”: it multiplies the price by the VAT fraction (1/6 at 20%) to get the VAT, and takes the VAT off the price to get the net amount. It has nothing to do with the reverse charge, where the customer accounts for the VAT.