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Online VAT Calculator for UK Entrepreneurs

Our free UK VAT calculator allows you to calculate your value-added tax rate backwards, add or extract VAT from a given price.

VAT calculation

First, let’s fill out some numbers. Type in the gross sum, pick your VAT percentage and VAT calculation operation.

VAT calculation operation

Net amount£0

VAT excluded£0

How Does VAT Calculator Work?

We have created this easy to use VAT calculator so that you could find out the amount of money you need to pay to HMRC. To calculate VAT, enter the gross amount, tax percentage and choose the vat calculation operation (add or exclude). By default the VAT calculator rate is set to 20%.

Gross VAT - addition to net sum

Gross VAT - addition to net sum

VAT calculation formula:

Gross: (Amount / 100) * (100 + VAT%)

Simply divide the amount by 100 and then multiply by (100 + VAT percentage).

This is the sum inclusive of VAT (Gross Amount). To ensure you have the right amount, try our VAT calculator.

Net VAT - exclusion from gross amount

Net VAT - exclusion from gross amount

To remove Value Added Tax or to make a reverse VAT calculation the formula is the following:

Net: (Amount / 120) * 100 Easy!

Divide the amount by 100 + VAT% and then multiply by 100. That’s the amount excluding VAT taxes (Net amount). You can calculate VAT online using our calculator if you have trouble.

Download your free VAT guide

Unsure how to calculate the tax you owe? Download our free guide on VAT for SMEs and e-commerce sellers.

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  • How does VAT reverse calculation work?

    VAT (Value Added Tax) is a consumption tax that's tacked on to a product or service as its value rises during the production or distribution process.

    VAT reverse charge, on the other hand, means that customers can charge themselves VAT and pay it immediately to HM Revenue and Customs (HMRC) rather than waiting for the supplier to give them an invoice.

    The VAT reverse charge mechanism transfers the burden of VAT recording from the seller to the buyer of a commodity or service. The initiative makes it easier for buyers to file VAT returns without the seller having to register as a VAT payer in the nation where the goods or services were delivered.

    When computing the reverse charge, customers need to keep in mind that the VAT rate on the supplier's side should be treated as if the provider were operating in the nation where the transaction is taking place. The taxable value is the amount paid to the provider, and the reverse VAT is computed by multiplying it by the appropriate VAT rate (for example, 30 %). This VAT figure should be included in the beneficiary's sales and purchases sections.

    The commonly used formula to calculate VAT Reverse is: (Original Figure) divided by 1*. (The VAT %) *equals New Figure excluding VAT. To find the entire amount of VAT that has been taken from your original figure, subtract the Original Figure from the New Figure Excluding VAT.

  • How to calculate VAT Net Margin?

    Instead of taxing the whole selling price, VAT margin schemes charge the difference between what you purchased for an item and what you sold it for. On the difference, you pay 16.67 % (one-sixth) VAT. When selling secondhand products, works of art, antiques, and collectors' items, you might opt to employ a margin plan. By maintaining accurate records and submitting them on your VAT return, you can start employing a margin plan at any time. You don’t need to register.

    Only when you sell things for more than you bought them for do you have to account for VAT under the margin scheme (you do not account for negative margins). To use the scheme, you must evaluate the value of your current stock, compute the VAT payable, and determine what documents you must preserve. You must be able to identify the following items to value your stock on hand: qualifying stock and purchase value. The original purchase invoices can be used to calculate the value. You can utilize another fair and reasonable technique if you're freshly enrolled or don't have original purchase invoices.

    At the end of each tax period, the VAT is computed. To calculate the VAT margin and VAT due, you should calculate the buy and sale prices. The gross margin is calculated by subtracting the buying price from the selling price. The gross margin is then multiplied by 1/6. The difference between what you spent for the items and what you sold them for is what you owe in VAT, not the total profit you gained on them.

    Finally, you must retain up-to-date and distinct records of purchases and sales (link to selling part), as well as how you calculated the VAT payable, for six years. If HMRC is unable to verify the margins you've stated, VAT on the full selling price of the products you've delivered will be payable.

  • What is a flat rate VAT?

    The VAT flat rate scheme is a method of paying VAT in which a company pays a set proportion of its annual revenue. The VAT flat rate scheme is intended to make the process of filing a VAT return easier for small enterprises.

    Its goal is to guarantee that businesses pay about the same amount of VAT as other VAT systems without having to submit as much paperwork. Businesses maintain the difference between the amount of VAT paid to HMRC and the amount of VAT paid by customers under the flat rate scheme. To participate in the VAT flat rate scheme, your company must be VAT-registered and have an expected annual revenue of less than £150,000 (excluding VAT).

    Businesses who want to utilize the VAT flat rate scheme are required to apply to HMRC, unlike other VAT accounting schemes. It's also a good idea to talk to an accountant or a professional tax expert before joining the plan to see if it's suitable for your company.

    The tax you pay is computed by calculating your VAT flat rate by your VAT-inclusive turnover under the VAT flat rate scheme. Your flat rate is determined by the sort of business you run and the amount of money you spend on merchandise. However, in the first year after registering for VAT, all enterprises receive a 1% reduction.

    If your company spends a modest amount on products, you're considered a 'limited-cost firm' or 'limited-cost trader,' and you'll have to pay a higher flat rate of 16.5%. To be considered a limited-cost firm, you must spend no more than 2% of your total revenue on items. Even though £1,000 represents more than 2% of your sales, you are still deemed a 'limited-cost firm' if you spend less than £1,000 per year on products. If you're not a limited cost trader, your flat rate will be determined by the sort of business you operate. For various sectors, there are different flat prices.

    A fixed-rate of 4% applies to businesses that offer food, candy, newspapers, cigarettes, or children's apparel at the lowest end. Accountants, bookkeepers, computer and information technology consultants, civil and structural engineers, architects, and surveyors all have a flat charge of 14.5%.

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