Answers · UK 2025/26

How much is VAT on £500 in the UK?

UK VAT at the standard 20% rate on £500 (net) is £100, giving a gross price of £600. Working backwards from a £500 gross (VAT-inclusive) price: the VAT element is £83.33 and the net price is £416.67.

Last updated: 10 July 2026Last reviewed: 10 July 2026How we verify

Full answer

Calculating 20% VAT on £500 in the UK. Adding VAT to a net price: £500 net x 0.20 = £100 VAT, giving a gross (VAT-inclusive) price of £600. Extracting VAT from a gross price: £600 gross x (1/6) = £100 VAT, and £600 / 1.20 = £500 net -- confirming the same figures in reverse. If instead £500 is already a VAT-inclusive gross price, the VAT element is £500 / 6 = £83.33, and the net price is £500 / 1.20 = £416.67. This distinction between adding VAT to a net price and extracting VAT from a gross price is one of the most common sources of error for small businesses and freelancers invoicing clients. Reduced rate 5% (domestic energy, children's car seats, mobility aids, stop-smoking products) on £500 net gives £25 VAT. Zero rate (0%) applies to most food, books, newspapers, children's clothes and prescription medicines. Exempt supplies (insurance, financial services, education, health) charge no VAT at all, and the supplier cannot reclaim input VAT on related costs. The UK VAT registration threshold is £90,000 of taxable turnover. Use the VAT calculator to add or remove VAT from any amount instantly.