- 1). Figure out what VAT rate you need to charge. Most taxable goods and service are charged at the standard rate of 17.5 percent rate (or 20 percent after Jan. 2011).
- 2). Calculate the VAT for the item. To find the VAT amount, multiply the item's net price (the price before tax) by the following:
0.175 for the 17.5 percent tax rate
0.2 for the 20 percent tax rate
0.05 for the 5 percent tax rate.
For example, if you were selling a £95 bicycle at the new standard rate of 20 percent, the VAT amount would be:
£95 x 0.2 = £19. - 3). Add the amount you calculated in Step 2 to the price of the item. In the above example, the bike cost £95 and the VAT was £19 so:
£95 + £19 = £114.