Skilful DesignersVAT formulas
Add VAT: gross = net × (1 + rate) · Remove VAT: net = gross ÷ (1 + rate)
At 20%, adding VAT means multiplying by 1.2 and removing it means dividing by 1.2. The VAT inside a VAT-inclusive price is rate ÷ (100 + rate) of it: one sixth at 20%, and one twenty-first at 5%.
Worked examples
- Add 20% to £750: £750 × 1.2 = £900, including £150 VAT.
- Remove 20% from £1,440: £1,440 ÷ 1.2 = £1,200 net, and £240 VAT.
- Add 5% to £80: £80 × 1.05 = £84, including £4 VAT.
VAT for freelance designers
Most freelance designers start below the £90,000 registration threshold and do not charge VAT. Once you are registered, add 20% to every UK invoice, show your VAT number, and pay the VAT you collect to HMRC, minus the VAT you paid on business purchases such as a new laptop or software. The invoice generator adds the VAT lines for you.
Frequently asked questions
How do I add 20% VAT to a price?
Multiply the price by 1.2. A £500 fee becomes £600, of which £100 is VAT.
How do I remove VAT from a price?
Divide the price by 1.2 to get the amount before VAT. The VAT is one sixth of the VAT-inclusive price. For £600, the net amount is £500 and the VAT is £100. Do not take 20% off the total: that gives £480, which is wrong.
When does a freelancer have to register for VAT?
When your VAT-taxable turnover goes over £90,000 in any rolling 12-month period, or you expect it to go over £90,000 in the next 30 days on its own. You can register voluntarily below that, which can make sense if most of your clients are VAT-registered businesses that can reclaim it.
Do design services have VAT?
Design work for UK clients is standard-rated at 20% if you are VAT registered. Work for business clients outside the UK is usually outside the scope of UK VAT under the place of supply rules, so you do not add UK VAT, but you should note the reason on the invoice.
Sources
The figures and rules in this tool follow these official sources, checked on 3 November 2026:
Cite this tool
Skilful Designers. “VAT Calculator.” https://skillfuldesigners.co.uk/vat-calculator/ (updated 3 November 2026). Built by Sumair Roudani.