VAT Calculation Generator
Extracting VAT from a gross figure is not the same as taking the rate off it — 20% off £120 is £96, but the net is £100. It is one of the most common invoice errors there is. This works in whole pennies, adds or extracts the tax as you choose, and checks that the net and the tax sum back to the gross exactly, then shows what the round trip does.
What this generator does
Computes the tax in whole pennies and derives the third figure as the remainder, so the three always reconcile. It then works the calculation back the other way to show whether the round trip returns the original amount.
How to use this tool
- Choose whether to add VAT or extract it.
- Enter the amount in pence.
- Set the rate.
- Check the three figures: net, VAT and gross, which always add up.
Understanding the controls
- Direction
- Adding VAT starts from a net figure; extracting starts from a gross one. They are not inverses at the penny level, which the result makes visible.
- Amount
- In pence, so nothing is lost to decimal rounding before the calculation even starts.
- Rate
- 20% is the UK standard rate; 5% applies to some domestic supplies. Any whole rate works.
Common use cases
- Working out the net from a gross invoice total correctly
- Adding VAT to a quoted price without rounding drift
- Checking an invoice's tax line against the total
- Teaching the VAT fraction as a shortcut for extraction
- Producing exact figures for a bookkeeping entry
How this generator works
Adding VAT multiplies the net by the rate and rounds to the nearest penny, then the gross is the sum of the two. Extracting VAT divides the gross by one plus the rate to get the net, and takes the tax as the remainder rather than rounding it separately — which is what guarantees the two parts always sum back to the gross. Before display the parts are added up against the gross, the tax is confirmed within a penny of the exact percentage, and the reverse calculation is run to show any unavoidable penny of drift.
Randomness and fairness
Nothing here is random. An amount and a rate give exactly one breakdown. This is arithmetic for planning and teaching, not financial advice, and it knows nothing about your circumstances.
For how randomness is produced across the whole site, see how Generate Random works.
Limitations and good to know
- Rounding is to the nearest penny per calculation; some accounting systems round per line and others per invoice, which can differ by a penny.
- Mixed-rate invoices need each line calculated separately, which this does not do.
- Reverse charge, margin schemes and partial exemption are all outside a simple rate calculation.
- This is arithmetic, not tax advice — the rate and the treatment are matters for your accountant.This is arithmetic for planning and teaching, not financial advice, and it knows nothing about your circumstances.
Privacy and your data
The calculation runs in your browser. The amounts and rates you enter are never transmitted, stored or included in analytics.
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