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Free and Accurate VAT Calculator

Take control of your finances and compliance with our instant online VAT calculator. Whether adding VAT to quotes or removing it from supplier invoices, our tool gives instant results — no spreadsheets, no stress. With the calculator, you get to:

  • Switch VAT rates – use 20% (standard), 5% (reduced), and 0% (zero).
  • Get net and gross amount – calculate the net by inputting the gross amount and adding the VAT rate to the net to get the gross amount.
  • GBP compatible – specifically designed for UK VAT calculations and ensuring HMRC compliance.

VAT Calculator

Net Amount (Excl. VAT): 0.00
VAT Amount: 0.00
Gross Amount (Incl. VAT): 0.00

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what is vat

What is VAT?

Value Added Tax (VAT) is a consumption tax added on most goods and services. VAT-registered businesses add tax to goods and services from the production stage to the distribution stage.

If a company's yearly taxable income exceeds £90,000, it is obligated to register for VAT. If your company's total taxable turnover is expected to exceed £90,000 within the next 30 days, you must register for VAT.

Businesses have the option to voluntarily register for VAT before they exceed the VAT thresholds.

Our VAT number registration services assist businesses in effortlessly acquiring a VAT number and initiating the process of charging their customers. VAT assists businesses in reclaiming tax on goods and services acquired from suppliers and manufacturers.

Once you become VAT registered, you must comply with HMRC and file VAT returns every quarter of the year. Our VAT returns filing service is effective and fast to ensure your VAT returns are filed before the deadline. Errors and late filing of VAT returns result in penalties that go up in 16 days, then after 31 days, until it is paid in full.

Invoice vs. Payment VAT Calculation

Businesses have two alternatives when calculating VAT: accrual accounting and cash accounting. Typically, VAT is calculated with the ‘accrual accounting method’, which is based on the invoice date rather than the payment date.

For example, if you received an invoice in April and payment is to be made in July, the VAT will be included in the April VAT return.

Payment VAT Calculation

The cash accounting method is mostly used by smaller businesses, which calculate VAT based on the payments received. To use this method, businesses must meet certain criteria, such as being VAT registered and having a taxable turnover of £1.35 million or less in the next 12 months.

VAT Rates in the UK

20%

Standard Rate

Most goods and services, such as marketing, furniture, adult clothing, jewelry, and many more, fall under the standard rate.

5%

Reduced Rate

This applies to goods and services taxed at a lower rate, such as electricity, children's car seats, gas, elderly mobility aids, and more.

0%

Zero Rate

Goods and services that fall under this rate are VAT taxable but charged at 0%, which include children's clothes and shoes, books, most food, and drinks.