# VAT Calculator 2026 — add or remove UK VAT

Source page: https://valem.run/calculators/uk/vat

UK VAT is 20% as standard, 5% on a reduced-rate list including home energy, and 0% on zero-rated goods such as most food and children’s clothes, with registration required once taxable turnover over the last 12 months passes £90,000.

**Tax year:** 2026

## How it is calculated

Three rates, and the third is the one worth understanding. 20% is standard and 5% covers a reduced-rate list. But 0% is a genuine rate, not an absence of one: zero-rated sales are taxable supplies charged at nil, so they count toward your registration threshold and you can still reclaim the input tax on what you bought to make them. Exempt supplies — postage stamps, financial and property transactions — do neither. GOV.UK states the rates and the exemptions separately, and conflating them is the most consequential VAT error a small business can make.

The threshold is £90,000, and the UK measures it unusually: over a **rolling** last 12 months, not over a tax year or a calendar year. That means the test can trip in any month, and a business whose turnover is comfortably under the figure for any given year can still cross it on a twelve-month view. Every other country in this family counts by calendar year.

Adding VAT multiplies the net by the rate; removing it divides the gross by one plus the rate, so £120 gross at the standard rate is £100 net. The B2B reverse charge is exposed as an input because it is what most people mean when they ask whether they must charge VAT.

## Worked example

With Amount of 100, this model computes Vat Amount of 20.

## Inputs

| Name | Label | Type |
| --- | --- | --- |
| `amount` | Amount | number |
| `direction` | Direction | string |
| `category` | What is being supplied | string |
| `annualTurnover` | Taxable turnover, last 12 months | number |
| `reverseCharge` | B2B reverse charge applies | boolean |

## Sources

- [GOV.UK — VAT rates (standard, reduced and zero)](https://www.gov.uk/vat-rates) (checked 2026-10-05)
- [GOV.UK — VAT registration: when to register](https://www.gov.uk/vat-registration/when-to-register) (checked 2026-10-05)

## What this page claims

The Valem engine reproduces this model's formula through 6 self-test cases. That shows internal consistency, not that the formula matches current law; the cited sources are the evidence for that. Estimate, not tax advice.

## For agents

- Model manifest (formula, constants, test vectors): https://valem.run/calculators/uk/vat.json
- Compute by URL: https://valem.run/calculators/uk/vat.json?amount=100
- MCP: https://valem.run/mcp/calculators (call `calculate` with calculator `uk/vat`)