Remove 20% VAT from a gross price

Divide the VAT-inclusive price by 1.20 to get the net amount, then subtract that net from the gross to get the VAT. On 120, the net is 100 and the VAT is 20. The equivalent shortcut is to multiply the gross by the VAT fraction 20/120, which reduces to one sixth. Subtracting 20% from 120 gives 96 because it takes 20% of the larger, VAT-inclusive base rather than reversing the increase applied to the original 100.

What to take away

Adding and removing a percentage use different bases, so subtraction does not undo multiplication.
At 20%, the included tax is exactly one sixth of the gross price, not one fifth.
Round the tax or net according to the invoicing rule that applies; intermediate rounding can move the final penny.

The full explanation

Every tax authority publishes a small fraction beside its VAT rate — one sixth at 20%, one twenty-first at 5%. It is not a rounding shortcut or an approximation. It is the exact share of a VAT-inclusive price that is tax, and knowing why it exists is most of what makes reverse VAT arithmetic obvious instead of fiddly. Read the complete guide for the reasoning, examples and definitions behind this answer.

Use the idea

VAT Calculatorhow to work out vat backwards from a gross price UK VAT Calculatorhow much vat is in a uk price at 20 percent Irish VAT Calculatorhow do i work out irish vat at 23 percent backwards German VAT Calculatorhow much is 19 percent german vat on a net price

Sources

VAT guide (VAT Notice 700), paragraph 7.3.1 — the VAT fractionHM Revenue & Customschecked Jul 31, 2026applies to 2026
Council Directive 2006/112/EC on the common system of value added taxCouncil of the European Union, via EUR-Lexchecked Jul 31, 2026