VAT Calculator

VAT Calculator

20%

VAT Calculation Result

VAT Calculator

We warmly welcome you to our site. This site is providing you with a VAT calculator UK (VAT on calculator, VAT tax calculator) to find VAT because standard VAT rates may change. In this article, we will guide you on how to remove(reverse, subtract, deduct) VAT from the gross amount or how VAT is added to the net amount.

The current standard VAT rates(inclusive, exclusive) are 20% in the UK, and on December 1, 2008, the VAT rate was reduced to 15%, but on January 4, 2010, again increased to 17.5%. The online VAT calculator is also available on our site. This tool is free for everyone who is willing to find VAT, and you can even change the VAT rate according to your need, but keep in mind that 20% is the standard VAT rate.

Man Thinking About UK vat calculator

What is VAT?

VAT(Value Added Tax) is a tax imposed on goods and consumer sales. Businesses in the UK(United Kingdom) usually pay VAT based on their annual sales. The tool available on our site allows you to effortlessly “add VAT” or “remove VAT.”

The VAT includes the amount charged to consumers, excluding the VAT the company paid when purchasing the raw material. The current VAT rate is 20% in the UK(United Kingdom), but there are two more VAT categories. The first is a reduced rate of 5%, and the second is the Zero rate.

Let’s explore the reduced rate of 5%. The government introduced it to promote trading. Services under this category are hotels, zoos, cinemas, pubs, concerts, shows, fairs, and cultural events.

Another type of tax is the zero rate, which is not payable by consumers. However, businesses can claim their tax because they paid tax to make that product or service. Goods under this category are advertisements for charity, books, newspapers, baby wear, sanitizers, and many more.

Items in Reduced Rate(5%)

Items In Zero Rate(0%)

Items in VAT Exempt

Water Supplies

Public Transport

Medical Treatments

Children’s Car Seat

Children’s Clothing

Organisation Membership

Women’s Sanitary Products

Water Supplies

Finance & Credit

Domestic Fuel And Power Consumption’s

Basic Food Items like Bread & Milk

Commercial Land Selling

Disabled Person Medical equipment’s

Books And Newspaper

Sports And Education Activities

How To Use UK Online VAT Calculator

The standard VAT Rate is 20% which is fixed for most of the businesses. But if you are interested in finding a reduced rate of 5% then you can write it into the given “ VAT Field”. Moreover, you can change the VAT rate according to your needs (0-100)by moving the slider.

  • Now, enter either the gross Amount or net price of your services or goods in the “Amount” Field.
  • After this, you can either Add or Remove VAT.
  • In order to Add VAT to the net Amount, you only need to press the “ Add VAT” button.
  • Otherwise, press the “ Remove VAT” button to Remove VA T from gross Amount.
  • Soon, the results appear on your calculator, and you can even copy them to your clipboard to keep track.

Different Types Of VAT

Depending upon the types of products or services offered by Businesses to consumers, there are five types of rates. All of them are mentioned below.

Standard VAT Rate

20% is the standard rate of VAT in the UK applied on most of the goods and services.

VAT Reduced Rate

5% is the reduced rate imposed on specific types of products like women’s or kid’s items.

Zero Rate of VAT

In the UK there are some services or goods that are not included in the category of either Standard or Reduced rate of VAT. All these items, like books and exports, are part of the Zero VAT Rate.

When To Register For VAT?

Check out all these terms and conditions before registering your business for VAT.

  • Your business’s annual turnover should exceed £90,000.
  • If this threshold is not completed in a year, then you are expected to exceed VAT in the next 30 days.
  • VAT registration is crucial so that you can reclaim the VAT you paid on purchasing goods.

Note: In April 2024, the annual turnover for VAT registration was reduced to £85,000.

How to Get Your VAT Number?

In order to get your VAT number, you need to register your business. Before registration, read out all the above conditions carefully. After completion of registration from HMRC, you will get a unique 9-digit code called VAT number. With this VAT number, you can pay or claim VAT easily.

Various VAT Rate Schemes

Before registering for VAT, you need to tell HMRC( His Majesty’s Revenue And Customs) what kind of accounting scheme you will use for it. Although you can use a variety of accounting schemes and some of them are mentioned below. Let’s discuss them one by one.

Standard Accounting Scheme

In this scheme you keep a record of VAT you charged on sales and VAT paid on purchase, and claim VAT Return from HMRC every quarter. This VAT scheme is the preferred one.

Annual Accounting Scheme

In this scheme, you can submit VAT Returns on an annual basis but need to pay VAT quarterly. The quarterly payments are estimated on the basis of the last return.

Vat Flat-Rate Scheme

Instead of paying quarterly you can pay a fixed percentage of VAT to HMRC and also reclaim your VAT return. It’s a simple flat-rate scheme useful for small businesses. You can take advice from any Accountant or Bookkeeper if it makes sense for your business.

Cash Accounting Scheme

In all the above schemes, you will pay or claim VAT whenever the invoice is generated. In the case of Cash Accounting, you can pay or collect VAT when cash changes hands.

VAT Calculation Formulas

Basically, there are two main types of formulas for the calculation of VAT. One is the Add VAT Formula, while the other one is the Remove VAT Formula. See the sections below to calculate UK VAT.

Add VAT Formula

  • Before calculation of VAT ensure which VAT rate(Standard/Reduced/Zero) will be applied on the services or goods.
  • Now, convert the VAT rate into decimal form. The process is quite easy to divide the VAT Rate by 100. Suppose the VAT Rate is 10% then the value we will get is 10/100= 0.10. 
  • Now calculate the VAT amount of the product. When you multiply the net Amount by a decimal value, you will get a VAT amount.
  • In the end, find out the gross Amount of the product. To get the gross Amount, add the VAT amount, and the net Amount of the product means VAT exclusive.
  • Suppose the net Amount of goods is £300 and VAT Rate is 20%. Then, its decimal point will be 20/100= 0.20.

VAT Amount = Net Amount x Decimal Value Of VAT Rate = £300 x 0.20 = £60

Gross Amount = VAT Amount + Net Amount = £60 + £300 = £360

Remove VAT Formula

  • Check out the products on which VAT is applicable.
  • When we remove VAT from the gross Amount, we will get the net Amount of the product.
  • To calculate the net Amount, we have a formula in which we divide the gross Amount by 1+ by the decimal value of the VAT Rate.
  • Finally, by subtracting the net Amount from the gross Amount, we will get the Amount of VAT imposed on the product.
  • Suppose we have a gross amount of £360 and the VAT Rate is 20%. Its decimal value of rate would be 20/100=0.20.

Net Amount = Gross Amount/ (1+0.20) = £360/ (1+0.20) = £300

VAT Amount = Gross Amount – Net Amount = £360-£300 = £60

Frequently Asked Questions (FAQs)

The standard rate of VAT currently in the UK is 20%. In 2011, it was 17.5 and then increased to 20%. It is imposed on most goods and services.

In order to calculate VAT-inclusive(at standard rate), multiply the original value by 1.2, and VAT-exclusive(at a reduced rate), multiply the value by 1.05. This is how you can calculate VAT in the UK.

The percentage of VAT in the UK is 20%, which is the standard VAT rate.

You can easily check out the validity of UK VAT Number by using the official website VAT Number checker tool. Simply put your VAT Number in the tool and verify it by pressing the search button.

In Add VAT, we will find out the gross Amount by adding the Amount of VAT to the Net Amount of the product. On the other hand, in Remove VAT we find Amount Of VAT by subtracting Net Amount from Gross Amount.

Final Words 

If you’re a citizen of the UK, then you need this calculator to find out Add VAT or Remove VAT. The process is just to put an amount in the tool and press either the Add or Remove VAT button. Before using this amazing tool check the VAT Rates applicable on the goods. You can use a Standard VAT rate of 20%, a Reduced Rate of 5% or Zero VAT Rate.