VAT Calculator

Online VAT Calculator (UK)

This VAT Calculator helps you quickly add VAT or remove VAT from a price on invoices and receipts. It can be used as a VAT Calculator UK or a VAT remover, showing the net amount, VAT amount, and gross total instantly.

Simply enter an amount and choose Add VAT or Remove VAT to calculate VAT in seconds. You can also change the VAT rate if it differs from the standard 20%, making it useful for both UK and non-standard VAT rates.

What is VAT?

Imagine you start a small UK business and begin making regular sales. Each time you sell, you add a tax to the price called Value Added Tax, or VAT. You collect this VAT from customers and keep clear records. At the end of the period, you pass the VAT to HM Revenue & Customs after adjusting for what you already paid on business costs.

As months pass, your business grows and sales increase. UK law sets a clear rule here. Once your taxable turnover exceeds £90,000 in any rolling 12-month period, VAT registration becomes compulsory. This turnover includes standard-rated, reduced-rated, and zero-rated sales, not profits. Many smaller firms register earlier to recover VAT and improve cash flow.

Now take a real example. You sell services worth £5,000 in a month and charge 20% VAT, so customers pay £6,000. During the same month, you incur £2,000 of costs and pay £400 VAT on them. You report £1,000 output VAT, deduct £400 input VAT, and pay £600 to HMRC. This simple flow shows how VAT works in practice.

VAT Registration in the UK

VAT Registration Threshold

The UK VAT registration threshold is £90,000 of taxable turnover. This limit is fixed in law and applies to all UK businesses.

Here is how the threshold works in practice:

  • The £90,000 limit is checked on a rolling 12-month basis, reviewed at the end of each month
  • It is based on turnover, not profit and not a financial year
  • Taxable turnover includes:
    • Standard-rated supplies (20%)
    • Reduced-rated supplies (5%)
    • Zero-rated supplies (0%)
  • VAT-exempt income is excluded from the calculation
  • Zero-rated sales still count toward the threshold
  • You must also register if you expect turnover to exceed £90,000 in the next 30 days alone

Once any of these conditions are met, VAT registration becomes legally mandatory under HM Revenue & Customs. Many businesses use a VAT calculator at this stage to track turnover and remove VAT correctly from sales figures before crossing the limit.

Types of VAT Registration

UK VAT law allows only specific and clearly defined registration types.

  • Standard VAT registration
    This is the default registration. You charge VAT on taxable sales, reclaim VAT on allowable business expenses, and submit VAT returns. Most businesses fall into this category.
  • Voluntary VAT registration
    Businesses below the £90,000 threshold may still register. This allows recovery of input VAT on costs, but it also requires charging VAT on taxable sales. Businesses often register early to remove VAT from expenses or work smoothly with VAT-registered clients.
  • Group VAT registration
    Two or more UK businesses under common control can register as one VAT group. The group submits a single VAT return, and supplies between group members are ignored for VAT purposes.
  • Non-UK (overseas) VAT registration
    Overseas businesses making taxable supplies in the UK must register for VAT. There is no registration threshold for non-UK businesses.

In all cases, VAT obligations are driven by turnover rules, not business size or profit. Using a VAT calculator helps monitor limits and remove VAT accurately when reporting figures.

VAT Rates in the UK

The UK applies three VAT rates depending on the type of goods or services supplied. These rates are set by law and administered by HM Revenue & Customs. The standard rate of 20% applies to most goods and services. A reduced rate of 5% applies to specific items such as domestic energy and certain residential works. A zero rate of 0% applies to essentials like most food, books, and children’s clothing. Zero-rated supplies are still taxable and count toward the VAT registration threshold, while VAT-exempt supplies do not.

VAT Around the World

VAT Remover

When Remove VAT is selected, the entered amount is treated as VAT-inclusive (gross). Because UK VAT is calculated on the net price, VAT cannot be removed by subtracting a percentage; instead, the original VAT calculation must be reversed.

Net = Gross/1+r​

This formula removes VAT by dividing the gross amount by the VAT multiplier, where r is the VAT rate (for example, 0.20 for 20%). Once the net amount is known, the VAT portion is calculated as:

VAT = Gross−Net

The calculator then confirms the result using:

Gross = Net+VAT

For example, at 20% VAT, a gross amount of £120 divided by 1.20 gives a net amount of £100, with £20 identified as VAT. The same reverse VAT formula applies to all UK VAT rates used in the calculator, including 5% and 0%.

How VAT Is Calculated

Output VAT

Imagine you run a small UK business and complete a job for a client. You agree on a net price of £1,000 for your service. Because you are VAT-registered, you must add VAT to this price before billing the customer. With the standard VAT rate at 20%, the VAT on the sale is calculated as:

Output VAT = Net Price×VAT Rate

Output VAT = 1,000×20% = 200

Your customer pays £1,200 in total. Out of this amount, £200 is output VAT. This VAT is not your income. You hold it temporarily and later report it to HM Revenue & Customs.

Input VAT

Now continue the same story. To complete that job, you buy materials costing £500. Your supplier charges VAT at 20%, so you pay £600 in total. The VAT part of this purchase is calculated as:

Input VAT = Net Cost×VAT Rate

Input VAT = 500×20%=100

That £100 is input VAT. It is VAT you have already paid on business expenses and are usually allowed to reclaim. At the end of the VAT period, you offset this input VAT against your output VAT using the fixed rule:

VAT Payable = Output VAT−Input VAT

VAT Payable = 200−100=100

You pay £100 to HMRC. This shows how VAT flows through your business: you collect VAT on sales, recover VAT on costs, and pass on only the difference.

VAT Deadlines, Penalties, and Interest

VAT Return and Payment Deadline Rules

Most VAT-registered businesses must submit the VAT Return online and ensure payment reaches HMRC by the same deadline. The deadline is usually 1 calendar month + 7 days after the end of the VAT accounting period.

Late Submission Rules (VAT Return Penalty Points)

Late VAT Returns use a points-based system. Each late return adds 1 point. When you hit the threshold, HMRC charges £200. Then every further late return while you stay at the threshold triggers another £200.

Late Payment Rules (Penalties + Interest)

Late payment charges are separate from late submission points. HMRC charges late payment interest from day 1 the payment is overdue. The interest rate is Bank of England base rate + 4%.

If the payment goes beyond 15 days overdue, penalties start:

  • 16–30 days overdue: first penalty = 3% of VAT unpaid at day 15
  • 31+ days overdue: first penalty becomes 3% at day 15 + 3% at day 30
  • Second penalty (31+ days): 10% per year, charged daily from day 31 until paid