VAT Calculator

🧾 Calculate VAT

Quick VAT calculations.

Easily calculate Value Added Tax for invoices, pricing, or checking receipts.

Add VAT: Enter the Net amount (before tax) to find the VAT amount and the final Gross price.
Remove VAT: Enter the Gross amount (including tax) to see the original Net price and the VAT paid.

Supports any VAT rate, including the standard 20%, reduced 5%, and zero rate (0%).

📊 VAT Reverse Charge & Schemes

Understanding different VAT rules and scenarios.

Advanced VAT Tools Coming Soon

We're developing tools to help with Reverse Charge VAT, Flat Rate Scheme calculations, and VAT MOSS for digital services.

Simplifying complex VAT rules for freelancers and small businesses.

🎓 Understanding VAT

What is VAT?

Value Added Tax (VAT) is a consumption tax applied to most goods and services sold by VAT-registered businesses in the UK. When consumers see a price, it usually includes VAT (the Gross price). Businesses often work with prices before tax (the Net price) and add VAT on invoices.

The main UK VAT rates are:

Standard Rate: 20% - Applies to most goods and services.
Reduced Rate: 5% - Applies to some items like domestic fuel, energy-saving materials, and children's car seats.
Zero Rate: 0% - Applies to essentials like most food (excluding restaurant meals), books, newspapers, and children's clothing. No VAT is charged, but businesses can still reclaim VAT on related expenses.

Some items are Exempt from VAT (e.g., postage stamps, financial services, education), meaning no VAT is charged and businesses cannot reclaim VAT on related expenses.

How This Calculator Works

This tool handles the two most frequent VAT calculations:

Adding VAT: Calculates the VAT amount and Gross price when you start with a Net price (excluding VAT). Formula: `Gross = Net * (1 + VAT Rate)`.
Removing VAT: Calculates the VAT amount and Net price when you start with a Gross price (including VAT). Formula: `Net = Gross / (1 + VAT Rate)`. Note: You cannot simply subtract the VAT percentage from the Gross price.

Disclaimer

This calculator provides estimates based on the rate entered. VAT rules can be complex, especially regarding exemptions, place of supply, and specific schemes. Always refer to official HMRC guidance or consult a qualified accountant for advice specific to your business transactions.

📱 How to Use This VAT Calculator

Calculate VAT in two simple ways:

To Add VAT (Find Gross Price)

Enter the Net Amount (price before VAT).
Enter the applicable VAT Rate (e.g., 20).
Click the Add VAT button.
See the VAT amount and the final Gross price.

To Remove VAT (Find Net Price)

Enter the Gross Amount (price including VAT).
Enter the VAT Rate that was included (e.g., 20).
Click the Remove VAT button.
See the original Net price and the amount of VAT paid.

🇬🇧 UK VAT Rates Explained

The UK uses several VAT rates depending on the goods or services:

Standard Rate (20%)

The default rate applied to most goods and services, such as electronics, adult clothing, restaurant meals, and professional services.

Reduced Rate (5%)

Applies to specific items deemed socially important, including domestic fuel (gas/electricity), energy-saving materials, and children's car seats.

Zero Rate (0%)

Applied to essential items. No VAT is added to the price, but businesses can reclaim VAT on costs. Examples include most basic foodstuffs, books, newspapers, and children's clothing.

Some items, like financial services, insurance, and education provided by eligible bodies, are VAT Exempt.

🛒 Real-World VAT Examples

See how VAT calculations apply in everyday situations:

Example 1: Adding VAT to a Service (£500 Net Invoice at 20%)

A consultant invoices £500 (Net) for services. VAT needs to be added at 20%.

• Net Amount: £500.00
• VAT Rate: 20%
• VAT Amount: £500.00 * 0.20 = £100.00
• Gross Amount (Total Invoice): £500.00 + £100.00 = £600.00

Example 2: Removing VAT from a Retail Price (£120 Gross Receipt at 20%)

You bought an item for £120 (Gross) which includes standard VAT. You need to find the Net price and VAT amount.

• Gross Amount: £120.00
• VAT Rate: 20%
• Net Amount: £120.00 / 1.20 = £100.00
• VAT Amount: £120.00 - £100.00 = £20.00

Example 3: Adding Reduced Rate VAT (£80 Net Energy Bill at 5%)

Your energy supplier charges £80 (Net) for usage. VAT is added at the reduced rate of 5%.

• Net Amount: £80.00
• VAT Rate: 5%
• VAT Amount: £80.00 * 0.05 = £4.00
• Gross Amount (Total Bill): £80.00 + £4.00 = £84.00

❓ VAT Frequently Asked Questions

When should a business register for VAT?

In the UK, mandatory registration is required if your VAT-taxable turnover exceeds £85,000 in any rolling 12-month period. You can also register voluntarily below this threshold, which allows you to reclaim VAT on purchases but means you must charge VAT on sales.

What is the difference between Input VAT and Output VAT?

Output VAT is the VAT you charge customers on your sales. Input VAT is the VAT you pay on your business purchases and expenses. VAT-registered businesses typically pay HMRC the difference between their Output VAT and Input VAT.

How is 'removing' VAT calculated correctly?

You cannot simply subtract the VAT percentage (e.g., 20%) from the Gross price. To find the Net price when VAT was 20%, you divide the Gross price by 1.20. For 5% VAT, divide by 1.05. This calculator does this automatically when you select 'Remove VAT'.

Can I reclaim VAT on all business expenses?

Generally, you can only reclaim Input VAT on purchases directly related to making your VAT-taxable supplies. Some items, like business entertainment, have specific restrictions. You also need valid VAT invoices for claims. Consult HMRC guidelines or an accountant for specifics.

What is the VAT Flat Rate Scheme?

A simplified accounting scheme for small businesses (turnover under £150k). You pay HMRC a fixed percentage of your total turnover, but generally cannot reclaim Input VAT. The percentage varies by industry. It can simplify bookkeeping but isn't always the most tax-efficient option.

📞 Need VAT Advice?

VAT rules can be complex. For business-specific advice, consult HMRC's VAT helpline or speak to a qualified accountant or VAT specialist.

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