VAT inclusive vs VAT exclusive: £100 excluding VAT becomes £120 including 20% VAT

VAT Guides

VAT Inclusive vs VAT Exclusive: What’s the Difference?

Quick answer: a VAT-inclusive price already contains VAT and is what the customer pays. A VAT-exclusive price is before VAT, and VAT is added on top. £100 excl. VAT at 20% is £120 incl. VAT.

VAT inclusive vs VAT exclusive: £100 excluding VAT becomes £120 including 20% VAT — Image: vatcalculatorr.com

Side by side

	VAT exclusive	VAT inclusive
Also called	Net, “+ VAT”, ex VAT	Gross, “incl. VAT”
Who sees it	Business customers	Consumers
Convert to the other	× (1 + rate)	÷ (1 + rate)

Which one should you show?

In the UK and EU, prices shown to consumers must include VAT. Business-to-business price lists and quotes are often VAT exclusive, because VAT-registered customers can reclaim the VAT. If you quote exclusive prices, make it clear with “+ VAT” or “excl. VAT”.

Convert in one click

Use Add VAT in our VAT calculator to go from exclusive to inclusive, or Remove VAT to go back.

Example VAT invoice: £1,000 net subtotal plus £200 VAT at 20% gives a total of £1,200 including VAT — Image: vatcalculatorr.com

Convert prices instantly with the VAT calculator or the reverse VAT calculator.

Sources: Further reading: How VAT works on GOV.UK and the European Commission’s VAT rules for businesses.