UK VAT Calculator

How Does The UK VAT Calculator Work?

Welcome to our versatile UK VAT Calculator, designed to empower your financial decision-making! With our user-friendly interface, you have the freedom to customize your calculations effortlessly. Simply enter an amount and choose whether you want it displayed excluding VAT or with VAT added on top. Select between a standard 20% VAT rate or a reduced 5% VAT rate, and watch as the result unfolds before your eyes. Whether you’re a business owner, a savvy shopper, or simply curious about VAT calculations, our calculator is here to provide you with accurate and instant results.


VAT Calculator

VAT Calculator







Results

Amount Net Price Price (incl. VAT) VAT Amount

Frequently Asked Questions

What Is The Current UK VAT Rate

The standard VAT rate in the United Kingdom is 20%, which was raised from 17.5% during the Conservative & Liberal Democrats coalition government on January 4th, 2011.

The UK implements various VAT rates, which are as follows:

Standard UK VAT rate of 20%: This rate applies to the majority of goods and services.
Reduced UK VAT rate of 5%: This rate is applied to specific goods and services, such as children’s car seats and home energy.
Zero UK VAT rate of 0%: Certain goods and services are classified as zero-rated, meaning no VAT is charged. Examples include most food items and children’s clothing.

Please note that it’s important to refer to official sources, such as the UK government’s website, for the most up-to-date and accurate information on VAT rates in the UK, as they may be subject to change.

VAT RatePercentageExamples
Standard20%Alcoholic drinks, Confectionery, Crisps and savoury snacks, Hot food, Sports drinks, Hot takeaways, Ice cream, Soft drinks and mineral water, Catering, Products packaged as pet food, Betting and gaming, Bingo, Lottery ticket sales, Online lottery games, Retailer commission on lottery ticket sales, Admission charges by public authorities or eligible cultural bodies to certain cultural events, Antiques, works of art or similar (as assets of historic houses) sold by private treaty to public collections, Antiques, works of art or similar (as assets of historic houses) used to settle a tax or estate duty debt with HMRC, Advertising services for charities, Energy-saving materials permanently installed in dwellings and buildings used for a relevant residential purpose providing the total cost of them (not including VAT) is not over 60% of the cost of the installation of the products (not including VAT)
Reduced5%Children’s car seats, Home energy, Certain supplies of catering and hot takeaway food, Mobility aids for the elderly, Smoking cessation products — nicotine patches and gum, Building services for disabled people, Electricity for domestic and residential use or for non-business use by a charity, Gas for domestic and residential use or for non-business use by a charity, Heating oil for domestic and residential use or for non-business use by a charity, Solid fuel for domestic and residential use or for non-business use by a charity, Closed solid fuel fire cassettes, Electric dual immersion water heaters with factory-insulated hot water tanks, Electric storage heaters, Gas-fired boilers, Gas room heaters with thermostatic controls, Oil-fired boilers, Radiators, The installation, repair and maintenance of a boiler, radiators, pipework and controls forming a central heating system (including micro combined heat and power systems), The installation, repair and maintenance of renewable source heating systems. This means space or water heating systems which use energy from: renewable sources, including solar, wind and hydroelectric power; or near renewable sources, including ground and air heat, Connection or reconnection to the mains gas supply
Zero0%Most food, Children’s clothes, Certain animals, animal feeding products, plants and seeds, Physical education and sports activities, Admission charges by charities, Certain goods sold at charitable fundraising events, Charity shops — selling donated goods, Construction and sale of new buildings for a relevant charitable purpose, Building services for disabled people, Equipment for blind or partially sighted people, Equipment for disabled people, Magnetic tape adapted for recording speech for blind people together with apparatus for making and playing the adapted tape and certain low vision aids, Dispensing of prescriptions by a registered pharmacist, Incontinence products, Maternity pads, Sanitary protection products, Low vision aids, Education, vocational training and other connected services provided by an eligible body like a school, college or university, Cesspools, septic tanks or similar (domestic) — emptying, Sewerage services supplied to domestic or industrial customers

The information provided above comes from the official UK government website. VAT rates & Rates of VAT on different goods and services

How Do You Calculate UK VAT

If you have a price that does not explicitly list the VAT amount, but you want to calculate the VAT-inclusive or VAT-exclusive amounts, you need to know the applicable VAT rate. Here’s how you can calculate the missing VAT component:

VAT-Inclusive Amount Calculation:

Determine the VAT rate as a decimal. For example, if the VAT rate is 20%, convert it to 0.20. Divide the price by (1 + VAT rate) to calculate the VAT-exclusive amount.
Subtract the VAT-exclusive amount from the price to obtain the VAT amount.

VAT-Exclusive Amount Calculation:

Determine the VAT rate as a decimal.
Multiply the price by the VAT rate to calculate the VAT amount.
Add the VAT amount to the price to obtain the VAT-inclusive amount.

For example, let’s assume a price of £100 without explicitly stating the VAT:

VAT-Inclusive Amount Calculation (assuming 20% VAT rate):

Divide £100 by (1 + 0.20): £100 / 1.20 = £83.33 (rounded to two decimal places) as the VAT-exclusive amount. Calculate the VAT amount: £100 – £83.33 = £16.67 as the VAT component.

VAT-Exclusive Amount Calculation (assuming 20% VAT rate):

Multiply £100 by 0.20: £100 * 0.20 = £20 as the VAT amount.
Add the VAT amount to the price: £100 + £20 = £120 as the VAT-inclusive amount.

Please note that these calculations assume the VAT rate applies to the entire amount. To ensure accurate results, verify the specific VAT rate and any applicable rules or exemptions with official sources or consult a tax professional.

How Does VAT Work In The UK

Value-added tax (VAT) in the United Kingdom is a consumption tax that is imposed on the sale of goods and services. Here’s how VAT works in the UK:

  1. VAT Registration: Businesses with taxable turnover above a certain threshold (currently £85,000 as of 2023) must register for VAT with HM Revenue and Customs (HMRC). Voluntary registration is also possible for businesses with turnover below the threshold.
  2. VAT Rates: The UK has different VAT rates based on the type of goods or services being sold. The standard rate is 20%, but there are reduced rates of 5% and 0% for specific categories of goods and services. Some goods and services are exempt from VAT altogether.
  3. VAT Invoices: Registered businesses must provide VAT invoices to their customers for goods and services subject to VAT. The invoices should include the VAT registration number, VAT rate applied, and the amount of VAT charged.
  4. VAT Calculation: When a business sells goods or services, it must charge VAT on the selling price. The VAT amount is calculated by applying the appropriate VAT rate to the net amount (the selling price excluding VAT).
  5. VAT Payments and Returns: VAT-registered businesses are required to submit regular VAT returns to HMRC, usually on a quarterly basis. The VAT return summarizes the VAT charged to customers and the VAT paid on purchases or expenses during the reporting period. The business then pays the net VAT amount (VAT collected minus VAT paid) to HMRC or receives a refund if VAT paid exceeds VAT collected.
  6. Input VAT and Output VAT: Businesses can claim back VAT they have paid on purchases and expenses for their business activities. This is known as input VAT. At the same time, they charge VAT on sales, which is referred to as output VAT. The net amount, after deducting input VAT from output VAT, is the VAT liability or refund due.
  7. VAT Flat Rate Scheme: Some small businesses with annual turnover below a certain threshold may opt for the VAT Flat Rate Scheme. Under this scheme, businesses pay a fixed percentage of their total turnover as VAT instead of calculating input and output VAT separately.
  8. Compliance and Penalties: Businesses must comply with VAT regulations, maintain proper records, and submit accurate VAT returns. Non-compliance or errors may result in penalties and fines imposed by HMRC.

It’s important to consult with a tax professional or refer to official HMRC guidance for specific details and to stay updated on any changes to VAT regulations in the UK so you don’t make any costly VAT mistakes.

For a deeper understanding of VAT-related issues and professional advice, consider visiting the Chartered Institute of Taxation (CIOT), the leading professional body in the UK for advisers dealing with all aspects of taxation.

How To Check A UK VAT Number

To ensure the accuracy of your UK VAT number, it is advisable to utilize the official website provided by HM Revenue & Customs (HMRC). By visiting the HMRC VAT number validation tool, you can access the designated VAT number validation tool. Simply enter the VAT number you wish to verify into the provided field and click on the “Submit” or “Check” button. The tool will then cross-reference the input with the HMRC database, promptly confirming the validity of the VAT number.

In the event that the VAT number is deemed invalid or not found, it is recommended to reach out to the associated business or individual for further verification or clarification. Additionally, consider consulting with VAT Information Exchange System (VIES), which is a search engine owned by the European Commission that provides VAT number validation for the entire European Union. For more in-depth information, the Chartered Institute of Taxation offers comprehensive guides and resources on VAT-related issues.