VAT Calculator UK

There are three VAT rates: 20% standard (the default for most goods and services), 5% reduced (domestic fuel and power, children's car seats, energy-saving materials, sanitary products), and 0% zero-rated (most food, books and newspapers, children's clothing and footwear, public transport). Some items are exempt entirely from VAT (e.g. financial services, insurance, education, healthcare), which is different from zero-rated.

Use the 'Extract VAT' mode of this calculator. If the gross price is £120 at 20% VAT, the net is £120 / 1.20 = £100 and VAT is £20. For 5% VAT: £105 gross → £105 / 1.05 = £100 net, £5 VAT. Common scenario: reconciling supplier invoices, calculating reclaimable VAT, accounting for VAT-inclusive consumer prices.

VAT registration is mandatory once your annual VAT-taxable turnover exceeds £90,000 (raised from £85,000 in April 2024). You can also register voluntarily below the threshold — useful if you want to reclaim input VAT or appear more established to B2B clients. Once registered, you must charge VAT on sales, file quarterly returns, and pay HMRC.

The Flat Rate Scheme is for small businesses with turnover ≤ £150,000. You charge customers the standard 20% VAT, but pay HMRC a lower flat rate (typically 12–16%, depending on your business category). You generally can't reclaim input VAT under FRS. It simplifies accounting but isn't always cheaper — run the maths for your situation.

Both result in no VAT charged to the customer, but treatment is different for the supplier. Zero-rated supplies are TAXABLE at 0% — you can still register, claim input VAT, and recover any VAT on related costs. Exempt supplies are OUTSIDE the VAT system — you don't charge VAT but can't reclaim input VAT either. Most financial services and healthcare are exempt; most food and books are zero-rated.

Generally no — exports to outside the UK (including the EU since Brexit) are zero-rated for VAT, provided you keep evidence the goods left the UK. For services, the place-of-supply rules determine VAT treatment: most B2B services to overseas customers are outside the scope of UK VAT. For B2C services, rules are more complex and may require registration in the destination country (especially the EU OSS scheme).

Post-Brexit: For goods, B2B EU sales are zero-rated (treated as exports). B2C goods to EU customers may need registration under EU's IOSS / OSS schemes. For digital services to EU consumers, you must register under the EU OSS scheme and charge VAT at each customer's country rate. This calculator covers UK VAT only.

A quick way to extract 20% VAT from a gross amount: multiply by 1/6 (= 0.1667). For 5% VAT: multiply by 1/21 (= 0.0476). Example: £120 gross × 1/6 = £20 VAT. These shortcuts are popular among accountants. The calculator does this automatically when you select 'Extract VAT' mode.