How to add VAT to a price
Multiply the net price by the rate and add the result. At 20%, £500 net carries £100 VAT, so the gross price is £600. In one step: £500 × 1.2 = £600.
How to remove VAT from a price (reverse VAT)
Divide the gross price by 1 plus the rate: £600 ÷ 1.2 = £500 net. The VAT is the difference, £100. HMRC calls the shortcut the VAT fraction: at 20% the VAT is 1/6 of a VAT-inclusive amount, and at 5% it is 1/21.
Which VAT rate applies
- Standard rate 20%: most goods and services, including freelance and professional services.
- Reduced rate 5%: for example domestic electricity, gas and heating oil.
- Zero rate 0%: for example most food and drink (not catering, hot takeaway, alcohol or sweets). Zero-rated sales are still VAT sales: they go on your VAT return.
You must register for VAT when your taxable turnover goes over £90,000. Until you are registered you do not charge VAT, so do not add it to your invoices.
Rates and threshold from HMRC (GOV.UK). Rates checked on 6 October 2026. HM Revenue and Customs (HMRC) and GOV.UK · HM Revenue and Customs (HMRC) and GOV.UK
QuickBilling adds VAT per line on your invoices and keeps a VAT summary for each period. See the VAT summary.