How to Work Out VAT Backwards (2026)

The Direct Answer

To work out VAT backwards from a total that already includes VAT, divide the gross (VAT-inclusive) amount by 1 plus the VAT rate. At the UK's standard 20% rate (HMRC), that means dividing by 1.20. The result is the net price. Subtract the net price from the gross total to get the VAT amount.

For a shortcut that skips the net-price step entirely, use the VAT fraction — a single multiplier that pulls the VAT out of a gross total in one calculation. For the UK's 20% rate, the VAT fraction is 1/6: multiply the gross amount by 1/6 and you have the VAT directly.

Need the answer instantly rather than doing the arithmetic yourself? Use the VAT Reverse Calculator to remove VAT from any total in any country, or the UK VAT Reverse Calculator if you only need the UK's 20% and 5% rates. This guide explains the math behind those tools so you can check the numbers by hand or build them into a spreadsheet.

The Critical Mistake: Why You Cannot Just Subtract 20%

The single most common error in reverse VAT calculations — one that shows up in a surprising number of "how to" articles and even some homemade spreadsheets — is subtracting 20% of the gross total instead of dividing by 1.20. It looks intuitive, but it is mathematically wrong, and the gap gets larger as the total grows.

Here is why. VAT is charged as 20% of the net price, not 20% of the gross price. Once VAT has been added, the gross total is 120% of the net price — so 20% of the net price is only 1/6 of the gross total, not 1/5 (20%) of it. Subtracting a flat 20% from the gross overstates the VAT every single time.

The takeaway: whenever VAT has already been added to a price, the rate you apply going backwards is always smaller than the headline rate, because you are now working out a percentage of a bigger number (the gross) rather than the smaller number (the net) the rate was originally calculated on.

The VAT Fraction Explained

The VAT fraction is the standard shortcut accountants and bookkeepers use to pull VAT straight out of a gross figure without calculating the net price first. It is derived directly from the VAT rate:

For the UK's 20% standard rate: 20 ÷ (100 + 20) = 20/120, which simplifies to 1/6. For the UK's 5% reduced rate: 5 ÷ (100 + 5) = 5/105, which simplifies to 1/21. Multiply any gross total by the relevant fraction and the result is the VAT amount contained within it — no separate net-price step required.

VAT Fraction Quick-Reference Table

Standard VAT rates below are verified against HMRC for the UK, Revenue Ireland for Ireland, and the European Commission for other EU member states.

Most rates outside the UK's 20% and France's 20% don't simplify into neat fractions like 1/6 — that's a coincidence of the UK and France sharing the same 20% headline rate. For 19%, 21%, 22%, and 23%, just use the unsimplified fraction (e.g. 21/121) or divide by 1 plus the decimal rate, which always works regardless of whether the fraction simplifies nicely.

Worked Examples Across Rates

Want the UK-only version pre-built with both the 20% and 5% rates? The UK VAT Reverse Calculator handles both, and if you need to go the other way — adding VAT to a net price — use the UK VAT Calculator.

How to Do It in Your Head

For the UK's 20% rate, the fastest mental-math route is the 1/6 shortcut, because dividing by 6 is often easier than dividing by 1.2:

• Divide the gross total by 6 to get the VAT amount directly. £120 ÷ 6 = £20.
• Multiply that VAT amount by 5 to get the net price, or simply subtract the VAT from the gross. £120 − £20 = £100.
• For the 5% reduced rate, divide by 21 instead of 6 to find the VAT — trickier to do in your head, so a calculator or the 1.05-divide route is usually faster.

On a calculator, the division method is more reliable for non-round numbers: divide the gross by 1.20 (or 1.05, 1.19, 1.21, 1.22, 1.23 depending on the rate) to get the net price, then subtract from the gross to get the VAT.

How to Do It in a Spreadsheet

Both Excel and Google Sheets use the same formula syntax. If cell A1 holds the VAT-inclusive gross total and the rate is the UK's 20%:

If you want the formula to work for any rate — useful when you're mixing 20% and 5% items on the same sheet — put the rate as a decimal in a separate cell (say B1 holds 0.20) and reference it:

This is more robust than hard-coding 1.2 into every row, because updating B1 recalculates the whole column if a rate ever changes.

Common Mistakes to Avoid

• Subtracting the rate directly from the gross. As shown above, 20% of the gross total is not the VAT — it overstates it by roughly a fifth of the true figure.
• Using the wrong fraction for the wrong rate. 1/6 only applies to a 20% rate. Using it on a 5%, 19%, 21%, 22%, or 23% total will produce the wrong figure.
• Rounding too early. Round only the final net price and VAT amount to the nearest penny/cent — rounding intermediate steps can cause the net and VAT to no longer add back up to the exact gross.
• Forgetting zero-rated and exempt items. Items at 0% VAT have no VAT to remove — the gross and net figures are identical, and there is no fraction to apply.
• Mixing up rates on a single receipt. A supermarket receipt often contains items at 20%, 5%, and 0% VAT in the same total — you cannot apply one rate to the whole receipt; each rate band must be reversed separately.

Once you understand the math, you rarely need to do it by hand for every transaction — the VAT Reverse Calculator and the UK VAT Reverse Calculator apply the correct divide-by-(1+rate) formula instantly and handle rounding correctly, so you can paste in a gross total and get the net price and VAT amount without risking the subtraction mistake. If you're unsure whether a price you're looking at is VAT-inclusive or VAT-exclusive in the first place, the Inc VAT vs Ex VAT guide explains the terminology before you calculate anything.

Last updated: May 15, 2026 · Rate source metadata is tracked in the TaxesLedger tax data registry.

Data methodology reviewed by M. Imtinan Farooq — Data Engineer focused on financial data systems.

Imtinan specializes in financial data systems and multi-state US sales tax modeling. With hands-on experience building data pipelines that attach source metadata, confidence labels, and verification status to tax records, he helps keep TaxesLedger rates auditable and easier to refresh. Connect with him on LinkedIn. This is an educational calculator, not tax, accounting, or legal advice.

Data Sources: State DORs · Canada Revenue Agency · EU VAT authorities · Tax Foundation references