UK Reverse VAT & Percentage Calculator
Welcome to our free Reverse VAT Calculator. Easily remove VAT from gross amounts, calculate Domestic Reverse Charge (DRC) for construction, or calculate original figures before percentage change.
How to Use the Reverse VAT Calculator
By using our online Reverse VAT Calculator, taking 20% off a VAT-inclusive total does not give you the net figure — you have to divide by 1.20, not subtract a fifth. This Reverse VAT Calculator works in both directions and handles the Domestic Reverse Charge rules for construction work effortlessly.
Enter a gross or net amount above and pick the rate that applies. The Reverse VAT Calculator returns the other figure plus the VAT element itself, rounded the way HMRC expects to see it on an invoice.
🛠️ Reverse VAT Calculator Pro Tip: The 20% Subtraction Error
A widespread bookkeeping error is attempting to reverse VAT by subtracting 20% from the gross invoice (e.g. £120.00 minus 20% = £96.00). This is mathematically incorrect. Our Reverse VAT Calculator uses the true net formula: £120.00 / 1.20 = £100.00 net and £20.00 VAT.
Understanding UK Reverse VAT & Domestic Reverse Charge
The HMRC Domestic Reverse Charge (DRC) for building and construction services changes how VAT is handled in the UK. Under the Reverse VAT mechanism, the buyer or contractor receiving the service accounts for the VAT directly to HMRC, rather than paying it to the supplier or subcontractor.
- 20% Standard Rate: Applied to most standard construction services and supplies in the UK.
- 5% Reduced Rate: Applied to qualifying residential renovations and energy-saving measures.
- Invoice Compliance: Invoices issued under Reverse VAT rules must explicitly state that the UK reverse charge applies and show the amount of VAT to be accounted for by the customer without adding it to the invoice total. For official compliance guidelines, refer to the HMRC Official VAT Reverse Charge Guidance.
UK Reverse VAT Rates & Multipliers Matrix
For more detailed technical walkthroughs, explore our in-depth article on Canada Sales Tax Calculator (GST/HST/PST). You can also browse our full directory of free web utilities on the SBS ToolBench homepage.
Reverse VAT Calculator FAQs
Q1: What is the exact formula used by this Reverse VAT Calculator?
Net Price = Gross Price ÷ (1 + (VAT Rate ÷ 100)). The VAT Amount = Gross Price - Net Price.
Q2: Who needs to use the UK Domestic Reverse Charge (DRC)?
It applies to VAT-registered businesses in the UK operating within the Construction Industry Scheme (CIS) when buying or selling construction services.
Q3: How do I back-calculate pre-tax net values from a gross total?
To remove 20% VAT from a gross amount using our Reverse VAT Calculator, divide the total gross figure by 1.20. The resulting figure is your net price before VAT.
Q4: Can VAT-registered businesses reclaim reverse VAT?
Yes. VAT-registered businesses account for output VAT and reclaim input VAT simultaneously on commercial purchases using their standard VAT return (Box 4 in the UK).
Reverse VAT Calculator: How Domestic Reverse Charge Works (2026 Guide)
Master Section 55A VATA 1994, CIS construction invoicing, Box 1 & Box 4 VAT return entries, and subcontractor cash-flow management.
Read Full Technical Guide & Documentation →