What does "reverse VAT" mean?

Reverse VAT (also called "backing out VAT") means calculating the net (ex-VAT) price from a gross (VAT-inclusive) price. It is the opposite of adding VAT to a net amount.

Why would I need to reverse-calculate VAT?

Common reasons include checking a supplier invoice, calculating input VAT you can reclaim on a purchase, or splitting a gross payment into its net and tax components for bookkeeping.

Does the reduced 5% VAT rate use the same formula?

Yes — divide the gross amount by 1.05 to get the net, and subtract to find the £VAT. The formula is identical; only the divisor changes.

Reverse VAT Calculator

Enter any VAT-inclusive (gross) price to instantly extract the net amount and the VAT component.

How it's calculated

Net = Gross ÷ (1 + VAT rate)
VAT = Gross − Net

Example: £120 gross at 20% → Net = £120 ÷ 1.20 = £100; VAT = £20.

Frequently Asked Questions

What does "reverse VAT" mean?: Reverse VAT (also called "backing out VAT") means calculating the net (ex-VAT) price from a gross (VAT-inclusive) price. It is the opposite of adding VAT to a net amount.
Why would I need to reverse-calculate VAT?: Common reasons include checking a supplier invoice, calculating input VAT you can reclaim on a purchase, or splitting a gross payment into its net and tax components for bookkeeping.
Does the reduced 5% VAT rate use the same formula?: Yes — divide the gross amount by 1.05 to get the net, and subtract to find the £VAT. The formula is identical; only the divisor changes.