VAT on £40
Add or remove VAT at 20%, 5%, 0% on £40, with the net, VAT and gross figures.
Adding 20% VAT to £40 gives £48.00, of which £8.00 is VAT. Removing 20% VAT from £40 gives £33.33 net, with £6.67 of VAT inside the price. At the 5% reduced rate the VAT is £2.00 when added and £1.90 when removed; at 0% nothing changes.
£40 at every VAT rate
| Calculation | Net | VAT | Gross |
|---|---|---|---|
| Add 20% | £40.00 | £8.00 | £48.00 |
| Remove 20% | £33.33 | £6.67 | £40.00 |
| Add 5% | £40.00 | £2.00 | £42.00 |
| Remove 5% | £38.10 | £1.90 | £40.00 |
| Add 0% | £40.00 | £0.00 | £40.00 |
| Remove 0% | £40.00 | £0.00 | £40.00 |
What £40 looks like with and without VAT
A £40 purchase is the kind of thing that ends up as a receipt in a drawer: fuel, stationery, a parking charge, a working lunch. If the receipt shows a VAT number and the price includes VAT, then £6.67 of that £40 is tax you can reclaim on your return, leaving a net cost of £33.33. Without a valid VAT receipt you can still claim the £40 as an expense against profit, but not the VAT itself.
Working the other way, if you quote £40 before VAT and you are VAT registered, the customer pays £48.00: your £40 plus £8.00 that you collect for HMRC. At the 5% reduced rate, which applies to things like domestic energy and children's car seats, the same £40 becomes £42.00. Zero-rated items such as most food, books and children's clothing stay at £40 on the invoice, though they still count as taxable sales.
The 20% figures catch people out because the VAT inside a gross price is not 20% of the price. It is 20% of the net, which works out at 16.67% of the gross. So £40 including VAT contains £6.67, not £8.00. Keep that in mind when you are checking a till receipt or splitting a shared bill between personal and business use.
Source: GOV.UK: VAT Flat Rate Scheme; GOV.UK: VAT thresholds. Last updated .
Frequently asked questions
- How much is £40 plus VAT?
- £40 plus 20% VAT is £48.00. The VAT element is £8.00. At the 5% reduced rate the total is £42.00, and at 0% it stays at £40.
- How much VAT is included in £40?
- If £40 already includes 20% VAT, the VAT inside it is £6.67 and the net amount is £33.33. You divide by 1.2 to find the net, then subtract to find the VAT.
- What is £40 minus VAT?
- £40 minus 20% VAT is £33.33. That assumes the £40 was a VAT inclusive price. If £40 was already the net price, there is no VAT to take off.
Cite this page: “VAT on £40”, SoleKit, https://solekit.co.uk/vat-calculator/40