Remove VAT from a gross (VAT-inclusive) price to find the net amount and the VAT. Enter your figure, pick the rate and press Remove VAT.
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A reverse VAT calculation extracts the VAT that is already included in a gross (VAT-inclusive) price. The mistake almost everyone makes is subtracting 20% — that is wrong, because the 20% was added to the smaller net figure, not the larger gross one.
To remove VAT at the standard 20% rate you divide the gross price by 1.20. The VAT element is exactly one sixth of the gross.
| Step | Formula | Example (£120 gross) |
|---|---|---|
| Net (ex VAT) | gross ÷ 1.20 | £100.00 |
| VAT | gross − net | £20.00 |
Take £120 including VAT. Subtracting 20% gives £96, implying £24 of VAT — but the real VAT is £20 and the net is £100. Subtracting a percentage of the gross always overstates the VAT and understates the net. Dividing by 1.20 is the only correct method.
For the reduced 5% rate, divide the gross by 1.05. For zero-rated supplies there is no VAT to remove. Switch the rate above before pressing Remove VAT.
Divide £100 by 1.20 to get a net of £83.33, leaving £16.67 of VAT at the standard 20% rate.
At 20% the VAT fraction is 1/6 of the gross price. So you can also find the VAT by dividing the gross by 6.
Yes. "Reverse VAT", "remove VAT" and "VAT backwards" all mean extracting the VAT already contained in a VAT-inclusive price.