Free VAT calculator
Minimise human error with this easy-to-use calculator. It works out your VAT-inclusive prices for both the standard and reduced tax rates.
- Uses the accepted VAT formulas for standard and reduced VAT rates
- Calculates the correct VAT for your invoices
- Saves you time – get VAT-inclusive prices without having to calculate them yourself
Download the free VAT calculator
Fill in a few details to get the VAT calculator. Start calculating your standard and reduced-rate VAT prices today.
What is VAT?
VAT (Value Added Tax) applies to most goods and services sold in the UK. Registered businesses add VAT to their prices and send the money to HMRC. You can reclaim VAT paid on business purchases through VAT returns. Registering for VAT varies by turnover and types of goods or services sold.
- You must register for VAT if your business’s annual taxable turnover is more than £90,000.
- If your business earns less than £90,000 you can choose whether or not to register.
- You’re not allowed to register if you only sell goods and services that are VAT-exempt.
How VAT affects invoicing
If your business is VAT-registered, you must add VAT to the prices on your invoices to comply with tax regulations and avoid possible financial penalties. Using invoicing software that can calculate VAT for you can help reduce errors and save time.
Why calculating VAT is important for your business
VAT calculations are essential for your financial planning. They underpin your:
Budgeting
You need to factor in VAT (so that expenses and revenues show the total amounts) to calculate your budgets
VAT forecasts
Your future cash flow relies on calculating the exact amounts of money that come in and out of your business
Categorising expenses
By separating your VAT-inclusive and VAT-exclusive prices you’ll get a clearer picture of your finances
Calculating VAT when reimbursing expenses
When your business buys something, you’ll be charged prices that include VAT. Make sure to:
- Reimburse your employee-incurred expenses the full VAT-inclusive amount every time
- Reclaim the VAT later to reduce your business costs
- Consider using software to track and calculate your VAT
How to use this UK VAT tax calculator
Get your invoicing and admin done faster. Just follow these steps:
1. Download your VAT calculator for free
Add your contact info to the form, then the downloadable PDF will be sent to you via email.
2. Select the VAT rate
Choose the standard or reduced VAT rate, according to your product or service.
3. Add or subtract VAT
Add tax to calculate the VAT-inclusive price or subtract it from the total to calculate the price before VAT.
VAT rates in the UK
Here’s what you need to add to your prices:
- The standard rate is 20%
- The reduced rate is 5% – for goods and services like children's car seats and some energy-saving materials
- The zero rate is 0% - for some goods and services only (like most foods and children's clothing)
FAQs on VAT calculations
You’ll need to fill out a VAT return – usually every 3 months – to show the total amount you’re owed. Keep hold of your VAT invoices and receipts to prove you’ve charged and paid this tax.
Find out how to charge, record and reclaim VATYou’ll need to fill out a VAT return – usually every 3 months – to show the total amount you’re owed. Keep hold of your VAT invoices and receipts to prove you’ve charged and paid this tax.
Find out how to charge, record and reclaim VATYou should be able to register online for VAT – just go to the HMRC website with your NI and UTR numbers. For more info on how to register, check out our guide to VAT registration.
Register for VAT on the HMRC websiteGuide to VAT registrationYou should be able to register online for VAT – just go to the HMRC website with your NI and UTR numbers. For more info on how to register, check out our guide to VAT registration.
Register for VAT on the HMRC websiteGuide to VAT registration
Work out VAT faster with Xero software
Breeze through your VAT admin with Xero’s cloud-based software. Whether it’s adding VAT to your client invoices or completing your VAT return each quarter, Xero wins you back hours to spend on the rest of your business.
- Get your VAT calculated for you
- File VAT returns online
- Stay up to date with HMRC rules
Start using Xero for free
Access Xero features for 30 days, then decide which plan best suits your business.
Disclaimer
Xero does not provide accounting, tax, business or legal advice. This calculator has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business.