Add VAT to a net price or take it out of a gross price. With UK, Irish and European rates.
To add VAT, multiply the net price by 1 + the rate (1.20 for 20%). To remove it from a gross price, divide by that same number: simply taking off 20% gives the wrong answer.
In the UK the standard rate is 20% and the reduced rate 5%; in Ireland, 23%, with reduced rates of 13.5% and 9%.
Gross = net × (1 + rate) Net = gross / (1 + rate)
Because VAT is worked out on the net price, not the total. From 120, the net price is 120 / 1.20 = 100; taking off 20% would give 96.
It depends on the country and the product. Food, books and energy often have reduced rates. Check your tax authority’s guidance.