VAT Calculator
Simplify VAT Calculations and Ensure Compliance with Our Easy-to-Use VAT Calculator!
What is VAT & when must a business register for VAT?
VAT (Value Added Tax) is an indirect tax on goods and services, paid by the end consumer but collected by businesses. UK businesses with an annual taxable turnover above £90,000 (as of February 2025) must register for VAT.
Once registered, businesses charge VAT on sales and can reclaim VAT on purchases.
How do the different VAT rates apply to various goods & services?
The VAT rates are:
- Standard Rate (20%): Applies to most goods and services.
- Reduced Rate (5%): Applies to items like children’s car seats, women’s sanitary products and domestic fuel.
- Zero Rate: Applies to exports, books and some educational services. Certain services like insurance are VAT exempt and cannot reclaim VAT on purchases.
How do you calculate VAT and how can you remove VAT from a price?
Adding VAT: Multiply the net price by the VAT rate (eg, £400 x 0.20 = £80 VAT). Add this to the net price for the gross amount (£400 + £80 = £480).
Removing VAT: To find the net price from the gross price, divide the gross by 1 + VAT rate (eg, £450 / 1.20 = £375 net). Subtract the net from the gross for the VAT amount (£450 – £375 = £75).
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