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Lifestyle

VAT / GST Calculator (Add or Extract Tax)

Value Added Tax (VAT) — also called GST, IVA or TVA — is the consumption tax used by 170+ jurisdictions worldwide. Switch to "Add" to gross-up a net price, or "Extract" to back the VAT out of a tax-inclusive total. Quick presets cover the common rates (5 %, 9 %, 10 %, 20 % …).

Direction

Enter a tax-exclusive amount; the tool computes the VAT and the gross total a customer pays.

Net

£100.00

VAT / GST

£20.00

Gross

£120.00

Breakdown

Net
£100.00
VAT @ 20%
+£20.00
Gross
£120.00

VAT / GST is a consumption tax: businesses collect it on behalf of the tax authority, the final consumer bears the cost. This tool uses a single flat rate — zero-rated, exempt and multi-band items must be handled separately.

Formula

Add: gross = net × (1 + r) ;Extract: net = gross ÷ (1 + r) , VAT = gross − net

Frequently asked

What is the difference between VAT / GST and US-style sales tax?

Both end up paid by the consumer, but the collection model is very different. VAT / GST is multi-stage: every business in the chain (raw materials → manufacturer → wholesaler → retailer) charges VAT on its sales and reclaims VAT on its purchases — only the net difference reaches the tax authority. US sales tax is single-stage: only the final retail sale is taxed, and qualifying B2B purchases are exempt via a resale certificate. Practical differences: (1) VAT invoices typically show tax inclusive, sales tax is added at checkout; (2) VAT leaves a paper trail at every step, making evasion harder; (3) Sales tax can "pyramid" if a resale certificate is missing. This tool handles flat-rate VAT / GST — for US scenarios use the Sales Tax calculator on this site.

Why does "Extract VAT" use divide by (1 + rate)?

Because gross = net + net × r = net × (1 + r). For example, with a £100 net plus 20 % VAT, the gross is £100 × 1.2 = £120. To recover the £100 from £120, you divide by 1.2. A common mistake is "multiply the gross by 20 % to find the VAT" — £120 × 20 % = £24, not £20, because the 20 % is on the net, not the gross. The effective rate against the gross is r / (1 + r) = 20 / 120 ≈ 16.67 %.

Why does Hong Kong have no VAT calculator on shop receipts?

Hong Kong has run a "simple, low-tax" system since 1841: the main revenue sources are profits tax, salaries tax and property-related taxes (rates, stamp duty, government rent). A 5 % GST was floated in a 2006 public consultation but shelved after strong opposition. As a result, prices on Hong Kong shelves and receipts are the final price — no hidden VAT for tourists. For HK-specific taxes use this site's Stamp Duty and Salaries Tax calculators.

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