VAT calculation: net to gross and gross to net
In short: Gross price = net × (1 + VAT rate), net price = gross ÷ (1 + VAT rate), and the VAT amount = net × rate. At 20% VAT: £100 net becomes £120 gross, and £120 gross is £100 net, not £96.
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The amount is
VAT rate
- Net
- £100.00
- VAT 20%
- £20.00
- Gross
- £120.00
Formulas
| What you need | Formula | Example (20%) |
|---|---|---|
| Gross price | net × (1 + rate) | £100 × 1.20 = £120 |
| Net price | gross ÷ (1 + rate) | £120 ÷ 1.20 = £100 |
| VAT from net | net × rate | £100 × 0.20 = £20 |
| VAT from gross | gross × rate ÷ (1 + rate) | £120 × 20/120 = £20 |
Typical VAT rates
- UK: 20% standard, 5% reduced, 0% zero-rated
- Germany: 19% standard, 7% reduced
- Hungary: 27% standard, 18% and 5% reduced
- Not VAT-registered: no VAT, state it on the quote
Common mistake: taking the rate off the gross
Do not subtract 20% from the gross price: £120 − 20% = £96 is wrong. Divide instead: £120 ÷ 1.20 = £100.
Stop calculating by hand
ÁrazóSzoftver calculates all of this automatically and sends a ready PDF quote.
One-time purchase: €559.99 + VATFAQ
How do I get the net price from the gross?
Divide by 1 + the rate. At 20%: £480 ÷ 1.20 = £400 net.
Should a quote show net or gross?
Ideally both: net per line, then net total, VAT and gross total. In ÁrazóSzoftver this is a setting.
Can I enter my prices including VAT?
Yes. ÁrazóSzoftver can treat entered prices as gross and works out net and VAT for the quote.