If you want to **add VAT to original figure**, to divide the amount by 100 and then multiply by (100 + VAT percentage). That's all, you got inclusive of VAT value (Gross amount).

For example, we will calculate VAT at a standard UK VAT rate of 20. If your business sells goods and services for £500

- First, you need to divide the amount by 100 per cent
- Then multiply this value by 120 per cent
- After the calculation, we get £600, which is the price including VAT

We will calculate VAT at a reduced VAT rate of 5. If your business sells goods and services for £1000

- First, you need to divide the price excluding VAT by 100 percentage
- Then multiply this value by 105 percentage
- We get
**gross amount**£1050 - the price VAT inclusive - It turns out that the VAT amount is £50

If you want to **subtract VAT from a figure** (to make a reverse VAT calculation), to divide the amount by (100 + VAT
percentage) and then multiply by 100. Now you know the amount exclusive of VAT (Net amount).

For example, we will calculate VAT at a standard UK VAT rate of 20. If your business sells goods and services for £500

- First, you need to divide the gross price by 120 per cent
- Then multiply the value obtained by 100 per cent
- We get £416.67, which is the price excluding VAT

We will calculate VAT at a reduced VAT rate of 5. If your business sells goods and services for £1000

- First, you need to divide the price including VAT by 105 percentage
- Then multiply the value obtained by 100 percentage
- We get
**net amount**£952.38 - the price without VAT - Accordingly, the VAT amount is £47.62

If you need to calculate VAT for several goods at once, it is easier to use Excel than a our VAT calculator. I created a Excel spreadsheet – download, it's
free.

Download spreadsheet

The following is an explanation of the VAT applied to coffee sold by a coffee shop owner in a store that contains coffee beans roasted by a nearby roaster with beans grown by a local farmer. Assume that the VAT is 20%. Each person or business involved in the chain must complete the government's VAT paperwork.

Fresh coffee beans first come from the local farmer. If the roaster pays a total of £5 per pound of fresh coffee beans, a VAT of £1 (£5 x 20%) is added to this cost, so that the farmer receives a total of: £6 for each pound of coffee beans from the roaster.

The roaster roasts the coffee beans and charges the coffee shop owner £10 per pound of roasted coffee beans. This means that the shopkeeper has to pay a total of £12 per pound, £10 for the roasted coffee beans and 20% VAT, which is £2. However, since the farmer has already paid the first £1 to the HMRC, the roaster only has to pay the government £1 in VAT.

A coffee shop owner can use each pound of roasted coffee beans to sell 5 cups of coffee at £4 each for a total of £20. For every 5 cups of coffee sold, the store owner receives a total of £24 from customers who bought his coffee, £20 and £4 VAT. However, since a total of £2 in VAT has already been paid to the state by the farmer and the roaster, the shopkeeper pays only £2 to the HMRC.