VAT Calculator UK
Use our VAT Calculator UK to calculate VAT on goods and services effectively. Use it to add VAT to a net price or calculate the VAT contained in a VAT-inclusive price. This calculator quickly breaks down the net amount, VAT amount, and gross amount.
Currently, in the UK, the standard rate of VAT is 20%, with a reduced rate of 5%, and a zero rate of 0% for some goods and services. The VAT rate that applies to you depends on what you are selling or buying.
At Cheap Accountants In London, our free online VAT calculator helps you instantly add standard 20% VAT to net prices or extract VAT and net amounts from gross totals.
How to Use Our UK VAT Calculator
- Enter the amount you want to calculate.
- Choose the VAT rate: 20% (standard), 5% (reduced) or 0% (zero-rated).
- Select your calculation:
- Add VAT if your price is excluding VAT (net).
- Remove VAT if your price already includes VAT (gross).
- Read your results: net amount, VAT amount and total amount.
UK VAT Rates
| Rate | Percentage | Common examples |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Home energy, children’s car seats, some mobility aids |
| Zero | 0% | Most food, children’s clothing, books, public transport |
Some supplies are exempt from VAT, such as certain insurance, finance and education services. Exempt is different from zero-rated, so it’s worth checking which applies to you.
VAT Calculation Formulas
To add VAT (20%):
Net price × 1.20 = Gross price
To remove VAT (20%):
Gross price ÷ 1.20 = Net price
To find the VAT within a gross price (20%):
Gross price ÷ 6 = VAT amount
Worked examples
Adding VAT: A freelancer invoices £500 + VAT.
VAT = £500 × 20% = £100. Total invoice = £600.
Removing VAT: A supplier’s invoice totals £1,200 including VAT.
Net = £1,200 ÷ 1.2 = £1,000. VAT = £200.
Do I Need to Register for VAT?
You must register for VAT if your taxable turnover goes over £90,000 in any rolling 12-month period, or you expect to exceed it in the next 30 days. This isn’t measured by tax year, so check your turnover at the end of every month. You can also register voluntarily below the threshold, which lets you reclaim VAT on business purchases. If your turnover later falls, the deregistration threshold is £88,000.
Missing the deadline can lead to penalties and back-payment of VAT, so it pays to get advice early.
VAT Calculator for Businesses
Our VAT calculator UK is useful for limited companies, sole traders, contractors, online businesses, retailers, small businesses, and self-employed individuals. It can be useful when checking prices, preparing invoices, or understanding how much VAT is included in a transaction.
VAT Calculator Examples
Here are some examples to help you understand the VAT calculator:
Example 1: Adding 20% VAT
Suppose your business charges £500 excluding VAT for a service.
- Net amount: £500
- VAT at 20%: £100
- Total including VAT: £600
Example 2: Removing 20% VAT
Suppose an invoice shows a total of £600 including VAT at the standard 20% rate.
Net amount: £600 ÷ 1.20 = £500
Therefore:
- Gross amount: £600
- Net amount: £500
- VAT: £100
Example 3: Adding 5% VAT
If a qualifying supply is subject to the 5% reduced rate and the net price is £300, then:
- Net amount: £300
- VAT at 5%: £15
- Total including VAT: £315
The 5% rate only applies to qualifying goods and services. Therefore, check the VAT treatment before applying it.
Common VAT Calculation Mistakes
Calculating VAT is simple when the correct VAT treatment is known. However, businesses can make mistakes when preparing invoices or records.
Some common issues include:
- Applying 20% VAT when a different rate applies
- Treating zero-rated supplies as VAT-exempt
- Removing VAT incorrectly from a VAT-inclusive price
- Failing to keep appropriate VAT records
- Assuming that every business with turnover below £90,000 must be outside the VAT system
A calculator can help with the mathematical calculation. However, it cannot determine whether a particular supply is taxable, zero-rated, reduced-rated or exempt.
FAQ's - Cheap Accountants in London
What is the current UK VAT rate?
The standard rate is 20%. The reduced rate is 5%, and some goods and services are zero-rated at 0%.
How do I calculate VAT from a total price?
Divide the VAT-inclusive price by 1.2 to get the net price. The difference is the VAT.
Can I reclaim VAT on business expenses?
If you’re VAT-registered, you can usually reclaim VAT on goods and services bought for your business, as long as you hold a valid VAT invoice.
What's the difference between zero-rated and VAT-exempt?
Zero-rated sales are still taxable supplies charged at 0%, and they count towards the registration threshold. Exempt sales don’t count.
How often do I file VAT returns?
Most businesses file quarterly returns online through Making Tax Digital-compatible software.
Is this calculator a substitute for professional advice?
No. It gives quick estimates, and your exact VAT position depends on your circumstances.
Do you offer online accounting?
Yes. We provide fully online accounting services, allowing you to manage your finances from anywhere in the UK. You can securely upload documents through our online portal, communicate with your dedicated accountant by phone or email, and receive digital copies of your accounts and tax returns. We also work with leading cloud accounting software such as Xero, QuickBooks, Sage, and FreeAgent, making it easier to keep your financial records accurate and up to date.
How do I switch from my current accountant?
Switching to our accounting service is simple and hassle-free. Once you appoint us, we’ll contact your previous accountant to request the necessary records and professional clearance on your behalf. We handle the transition process, transfer your accounting information securely, and ensure there is minimal disruption to your business. Our team keeps you informed throughout the process so you can continue running your business with confidence.
Do you work with landlords and contractors?
Yes. We provide specialist accounting services for landlords, property investors, contractors, freelancers, and consultants. Whether you need help with rental income reporting, Self Assessment tax returns, Corporation Tax, CIS returns, allowable expenses, or tax planning, our experienced accountants can provide tailored advice based on your circumstances. We help ensure you remain compliant while managing your tax obligations efficiently.
How quickly can I get started?
Getting started is quick and straightforward. After your initial consultation, we’ll gather the information we need, set up your account, and begin working on your accounting requirements immediately. If you’re switching from another accountant, we’ll manage the transfer process for you. In most cases, new clients can begin working with us within just a few days, depending on how quickly the required information is provided. Our team aims to make onboarding smooth, efficient, and completely stress-free.
Looking for Cheap Accountants in London?
Get professional accounting support without paying for unnecessary services. Whether you need company accounts, a tax return, bookkeeping or another accounting service, we’ll help you find a solution that suits your business.