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5% VAT calculator

Type in your Net Amount and we will automatically calculate your VAT Amount and Gross Amount at the UK Reduced VAT rate of 5%

The VAT Amount line shows how much VAT has been calculated from the Net Amount.
The Gross Amount is the Net Amount plus the VAT added to give you the gross total.

To manually calculate 5% VAT is simple, multiply the cost by 1.05
Example to add 5% £100 x 1.05 = £105 – This gives you the Gross Amount including VAT.

Reverse 5% rate VAT

£100.00 divided by 1.05 = £95.24
Subtract £95.24 from £100.00 (100 – 95.24) = £4.76 – this is the VAT Amount on an item sold for £100.00

The reduced VAT rate is 5%. It applies to specific goods and services that are considered essential or beneficial. For instance, it covers household energy, renovations to homes, and some hospitality services like eating out or staying in hotels. The reduced rate is lower than the standard VAT rate of 20% and aims to support certain sectors while making essential items more affordable for consumers.

Reduce VAT Rate History

The reduced VAT rate has undergone various changes and revisions throughout the history of VAT implementation in the UK. Here is a brief overview of its history:

1973-1974: When Value Added Tax (VAT) was first introduced in the UK in 1973, there was a single standard rate of 10%. No reduced rate was initially implemented.

1974-1979: In 1974, a reduced VAT rate of 8% was introduced for certain specific goods and services. This reduced rate primarily applied to the installation of energy-saving materials in dwellings, such as insulation.

1979-1991: The reduced VAT rate was increased from 8% to 15% in 1979. The 15% reduced rate was applicable to a wider range of goods and services, including domestic fuel and power, as well as certain repairs and renovations to residential properties.

1991-1997: In 1991, the reduced VAT rate was reduced from 15% to 8%. The 8% rate continued to apply to various goods and services, including domestic fuel and power, as well as certain renovations to residential properties.

1997-present: From 1997 onwards, the reduced VAT rate has been set at 5%. This rate has been applicable to a range of goods and services, including domestic fuel and power, children’s car seats, sanitary products, and some renovations and alterations to residential properties.