Calculate VAT for goods in the UK
Quickly work out your VAT calculations using our free UK VAT calculator, with both standard rate and reduced rate options.
- Gross total
- £0.00
- VAT
- £0.00
Gross total: £0.00, VAT: £0.00
What is VAT?
VAT (value added tax) is a consumption tax on goods and services, applied at each stage of production and distribution. VAT-registered businesses collect output tax from their customers on sales and reclaim the input tax they pay on business purchases.
What is output tax?
Output tax is the VAT a business charges on its sales. Registered businesses must add it to the price of taxable supplies and compare it against their input tax when filing VAT returns.
What is the UK rate of VAT?
The standard UK VAT rate is 20% and applies to most goods and services. A reduced rate of 5% applies to specific items such as home energy and children's car seats, and some goods are zero-rated or exempt.
Reduced-rate items
Items taxed at the 5% reduced rate include home energy, mobility aids, and certain renovation work on residential property. Businesses supplying reduced-rate items can still reclaim input VAT.
Zero-rated items
Zero-rated goods — such as most food, children's clothes, and exports — are taxable at 0%. Because they remain within the VAT system, businesses can reclaim VAT on related expenses.
VAT-exempt goods and services
VAT-exempt items sit outside the VAT system entirely. Businesses don't charge VAT on exempt supplies and cannot reclaim VAT on costs related to them.
When to register for VAT?
You must register for VAT when your taxable turnover exceeds £90,000 in a rolling 12-month period, or when you expect it to exceed the threshold within the next 30 days.
When can VAT be refunded?
VAT is refunded when your input tax exceeds your output tax for a return period. Valid VAT invoices are required to support any claim.
How to calculate VAT?
Use the calculator above, or multiply the net price by the VAT rate and add the result to the net price to reach the gross total. To remove VAT from a gross price at the standard rate, divide by 1.2.
Is VAT calculated on invoice or payment?
VAT is typically accounted for on the invoice date under accrual accounting. Smaller businesses may instead use a cash accounting scheme, accounting for VAT when payment is made or received.
How do you calculate VAT margin?
Calculate the margin — the selling price minus the purchase price — then apply the VAT rate to that margin and report it in your VAT return. Margin schemes apply to specific sectors such as second-hand goods.
People also ask
- To take 20% VAT off a VAT-inclusive price (finding the VAT-exclusive or original price), simply divide the VAT-inclusive price by 1.2.
- No. While 20% is the standard rate, there are also reduced rates (like 5% for some energy and health products) and zero rates (0%).
- To calculate the VAT you need to pay, subtract your input VAT (what you've paid on business purchases) from your output VAT (what you've charged customers).
- To work out 20% tax on a calculator, simply multiply the original amount by 0.20.
