VAT calculator
Work out UK VAT in seconds: add or remove VAT at the standard 20% rate, reduced 5% rate or zero rate, then see whether the VAT Flat Rate Scheme would actually save you money, including the 16.5% limited-cost trader test that catches most services businesses.
VAT calculator
Enter an amount to see the VAT breakdown.
Flat Rate Scheme comparison
Compare what you would pay HMRC on the Flat Rate Scheme against the normal scheme. The flat rate applies to your VAT-inclusive turnover.
Enter your figures for a Flat Rate Scheme comparison.
Worked examples
| Calculation | Result |
|---|---|
| Add VAT at 20% to £1,000 | ££1,200 gross, £200.00 VAT |
| Remove VAT from £1,200 at 20% | ££1,000.00 net, ££200.00 VAT inside |
| Add VAT at 5% to £4,000 (reduced rate, e.g. domestic energy materials) | ££4,200 gross |
| Remove VAT from £180 at 20% (a pub meal receipt) | ££150.00 net |
| Flat Rate Scheme: £30,000 turnover incl VAT, IT consultancy 14.5%, £2,500 goods spend | ££4,350 paid to HMRC (14.5% of turnover) |
| Same business, first year of registration (1% off the flat rate) | ££4,050, flat rate 13.499999999999998% |
| Same business with only £300 of goods (limited-cost trader test) | ££4,950, flat rate jumps to 16.5% |
Flat Rate Scheme rates by trade sector
You can join the Flat Rate Scheme if your VAT-inclusive turnover is £150,000 or less. The flat rate applies to your turnover including VAT, and in your first year of registration you get a 1% reduction.
| Trade sector | Flat rate |
|---|---|
| Building and construction services | 9.5% |
| Electrician | 8.5% |
| Hotel or accommodation | 10.5% |
| Retail food, confectionery, tobacco, newspapers | 4% |
| General retailing | 7.5% |
| Restaurant or take-away | 12.5% |
| Hairdressing or beauty treatment services | 13% |
| Management consultancy | 14% |
| Accounting or book-keeping | 14.5% |
| IT consultancy | 14.5% |
| Labour-only building or civil engineering | 14.5% |
| Motor repair | 15.5% |
VAT questions and answers
What are the current UK VAT rates?
The standard VAT rate is 20%, the reduced rate is 5%, and some goods and services are zero-rated at 0%. Most goods and services are charged at 20%; the 5% reduced rate applies to things like domestic energy, and children's car seats are zero-rated.
VAT rates ↗When do I need to register for VAT?
You must register for VAT when your VAT taxable turnover is more than £90,000 in a rolling 12-month period, or when you expect it to go over £90,000 in a single 30-day period.
VAT registration ↗How does the Flat Rate Scheme work?
Under the Flat Rate Scheme you pay HMRC a fixed percentage of your VAT-inclusive turnover, based on your trade sector, instead of accounting for VAT on every sale and purchase. In your first year of registration the flat rate is reduced by 1 percentage point.
What is the limited-cost trader test?
If you spend less than 2% of your VAT-inclusive turnover on goods, or less than £1,000 a year on goods when 2% of your turnover is more than £1,000, you are a limited-cost trader and your flat rate rises to 16.5%. Services you buy do not count, only goods, which is why most consultancies and agencies fail the test.
How do I remove VAT from a price?
To remove 20% VAT from a gross price, divide by 1.2, so a £1,200 receipt contains £1,000 net and £200 VAT. Dividing by 1.05 and 1 works the same way for the reduced and zero rates.