Two letters that change a price completely. Here's exactly what "inc VAT" and "ex VAT" mean, why quotes and receipts show them differently, and how to convert between the two in seconds.
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"Inc VAT" means Value Added Tax is already included in the price shown — it's the final total you actually pay, with nothing added at checkout. "Ex VAT" means the price excludes VAT — it's the base amount before tax gets added on top. Every confusing price tag, quote, or invoice you've ever squinted at comes down to this one distinction: has the tax already been added, or not yet?
Consumer prices in the UK and EU are legally required to show the inc-VAT total, so shoppers rarely need to think about it. Business-to-business quotes work the opposite way — they're almost always shown ex VAT, because the VAT figure is largely irrelevant to a VAT-registered buyer who will reclaim it anyway. Once you know which world you're in, converting between the two is simple arithmetic.
"Inc VAT" is shorthand for inclusive of VAT. When a price is labelled this way, the Value Added Tax has already been calculated and folded into the number in front of you. If a jacket is priced at £60 inc VAT, £60 is exactly what leaves your card — there's no extra tax line waiting to surprise you at the till.
This is the format almost every consumer-facing price uses in the UK and across the EU: supermarket shelf prices, restaurant menus, online checkout totals, and retail receipts. It's not a courtesy — it's the law. UK and EU consumer protection rules require that prices advertised or displayed to the general public include VAT, precisely so buyers can compare prices honestly without doing tax math in their head.
"Ex VAT" is shorthand for exclusive of VAT. The price shown is the pre-tax amount — VAT still needs to be calculated and added to arrive at the total actually payable. A supplier quote of "£500 ex VAT" means £500 is just the goods or services; the buyer will also owe VAT on top, typically itemised as a separate line on the invoice.
Ex-VAT pricing dominates the business world. Wholesale price lists, trade catalogues, contractor quotes, software subscriptions sold to businesses, and professional invoices are almost all shown ex VAT by default — for reasons that make complete sense once you understand who's actually affected by the tax.
The price before VAT is added — common on B2B quotes, wholesale price lists, and supplier invoices.
What you actually pay — the final total, required by law on UK and EU consumer shop prices.
The split isn't arbitrary; it follows who ultimately bears the cost of VAT.
This is why the same product can be quoted two completely different ways depending on the audience: a wholesaler selling to a shop will quote ex VAT, while that same shop selling to you will show inc VAT — even though the underlying VAT rate and rules haven't changed at all.
Watch out: a B2B quote shown "ex VAT" is not the final price — add 20% before you compare it to a consumer price.
The UK standard VAT rate is 20%, with a reduced rate of 5% (e.g. home energy) and a zero rate of 0% (e.g. most food and children's clothing). Converting between inc and ex VAT at any rate uses the same two formulas:
A freelance designer quotes £100 ex VAT for a logo. At the UK standard rate of 20%, VAT of £20 gets added on top. That £120 is the actual total the client pays once VAT is added to the invoice.
🧮 Example: £100 ex VAT at 20%
A receipt shows a total of £120 inc VAT. Because 20% has a clean VAT fraction of 1/6, you can also find the VAT amount directly: £120 × 1/6 = £20 VAT, confirming the ex-VAT price is £120 − £20 = £100.
🧮 Example: £120 inc VAT at 20%
If you'd rather not run the formula by hand every time, the VAT included/excluded tool converts any price instantly in both directions, at any UK or EU rate.
Quick check: confirm which rate applies before converting — the UK's 5% reduced rate and 0% zero rate don't use the standard 20% formula, so always check the label before doing the maths.
English isn't the only language with this split — every VAT country has its own shorthand for "before tax" and "after tax," and they show up constantly on European invoices, receipts, and price lists.
| Term | Meaning | Country / Language |
|---|---|---|
| Inc VAT / Incl. VAT | Price includes tax (final total) | UK, Ireland (English) |
| Ex VAT / Excl. VAT | Price excludes tax (before tax added) | UK, Ireland (English) |
| TTC (toutes taxes comprises) | All taxes included (inc VAT) | France |
| HT (hors taxes) | Excluding tax (ex VAT) | France |
| Brutto | Gross price, tax included (inc VAT) | Germany, Austria |
| Netto | Net price, tax excluded (ex VAT) | Germany, Austria |
| IVA incluido | VAT included (inc VAT) | Spain |
| IVA excluido / + IVA | VAT excluded (ex VAT) | Spain |
| IVA inclusa | VAT included (inc VAT) | Italy |
| IVA esclusa | VAT excluded (ex VAT) | Italy |
| Incl. BTW | VAT included (inc VAT) | Netherlands |
| Excl. BTW | VAT excluded (ex VAT) | Netherlands |
Standard VAT rates also vary by country, which is why the ex-VAT-to-inc-VAT gap looks different depending on where you're buying: Germany 19%, France 20%, Spain 21%, the Netherlands 21%, Italy 22%, and Ireland 23% are the standard rates most shoppers and sellers will encounter (European Commission). For a broader look at how VAT compares to other consumption taxes worldwide, see the Sales Tax vs VAT guide.
If you're VAT-registered, the price you quote a business client should be ex VAT, with VAT itemised separately on the invoice. Quoting a consumer client, on the other hand, is clearer as an inc-VAT total — they want to know the number they'll actually pay, not the accounting breakdown.
UK and EU retail prices should always be inc VAT by law, so comparing two consumer prices is a fair like-for-like comparison. Trade counters and wholesale outlets that sell to both businesses and the public sometimes display ex-VAT trade prices — always check the label before assuming what you'll pay at the till.
Overseas supplier quotes are frequently ex VAT (or ex the local equivalent tax), with UK or EU import VAT charged separately when the goods arrive. Budgeting off the ex-tax figure alone will understate the real landed cost — factor in VAT at the destination country's rate before comparing to a domestic inc-VAT price.
A well-formed VAT invoice shows all three figures: the net (ex-VAT) amount, the VAT rate and amount applied, and the gross (inc-VAT) total due. If an invoice only shows one number, check carefully whether it's labelled net, gross, ex VAT, or inc VAT before you pay it or reclaim it.
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Quick answers to the most common questions users ask.
"Inc VAT" (or "incl. VAT") means the price already includes Value Added Tax. It is the final, total amount you actually pay — no tax is added on top at checkout. UK and EU consumer prices are legally required to be shown this way.
"Ex VAT" (or "excl. VAT") means the price excludes Value Added Tax — it's the amount before tax is added. VAT is calculated on top and added separately, which is why most B2B quotes, invoices, and trade prices are shown ex VAT.
No — inc VAT simply means the tax is already built into the number you're looking at, so there are no surprises at checkout. An ex-VAT price of £100 and an inc-VAT price of £120 (at 20% VAT) represent exactly the same total cost; only the way the price is displayed differs.
Inc VAT is the total price you pay, with VAT already added. Ex VAT is the base price before VAT is added. The gap between the two is the VAT amount itself — at the UK's 20% standard rate, an ex-VAT price of £100 becomes £120 inc VAT.
In the UK, "inc VAT" means the displayed price includes the 20% standard rate (or 5% reduced / 0% zero rate, where applicable). UK consumer protection law requires retailers to show prices to the public inc VAT, so the sticker price is the price you pay.
Almost always ex VAT. Business-to-business quotes, trade pricing, and supplier invoices are typically shown ex VAT because VAT-registered businesses reclaim the VAT they pay, so the ex-VAT figure is the real cost that matters to them.
HT stands for "hors taxes" (excluding tax) — the ex-VAT price. TTC stands for "toutes taxes comprises" (all taxes included) — the inc-VAT price. French B2B quotes are shown HT; consumer prices must be shown TTC.
Netto (net) is the ex-VAT price, and Brutto (gross) is the inc-VAT price. German invoices commonly show both: the Nettobetrag, the Mehrwertsteuer (MwSt., VAT) added, and the Bruttobetrag as the final total.
Divide the inc-VAT price by 1 plus the VAT rate as a decimal. At the UK's 20% rate, divide by 1.20 — so £120 inc VAT ÷ 1.20 = £100 ex VAT. You can also find the VAT portion directly using the VAT fraction: at 20%, VAT = total × 1/6.
UK and EU consumer protection law requires businesses to display prices to consumers inclusive of VAT, so the shelf or checkout price is exactly what you pay. This differs from the US, where sales tax is usually added at checkout rather than baked into the sticker price.
VAT-registered freelancers usually quote ex VAT to business clients (who can reclaim the VAT) and add VAT separately on the invoice. When quoting individual consumers, showing the inc-VAT total is clearer and often expected.
Yes — a common mistake is applying VAT to a figure that already includes it, for example adding 20% to a supplier's inc-VAT invoice total. Always check whether a price is labelled inc or ex VAT before doing any tax calculation on it.
All rates, thresholds, and regulatory guidance cited on this page are sourced from official government publications and non-partisan research institutions.
European Commission — VAT Guide
Comprehensive portal for VAT rates and rules across all 27 EU member states, including B2B/B2C regulations.
ec.europa.euOECD — Consumption Tax Database
Global comparative data on VAT/GST structures and consumption tax trends across OECD member nations.
oecd.orgTaxesLedger is an independent educational tool. We are not affiliated with any government agency. Rate records include source metadata and verification status; always confirm with your jurisdiction's official Department of Revenue before filing. Last registry update: May 15, 2026.