UK VAT Rates
UK VAT Explained
Value Added Tax (VAT) is charged on most goods and services in the UK at 20%. Some items like energy and child car seats are at the reduced rate of 5%, while essentials like food and children's clothing are zero-rated. Businesses with turnover above £90,000 must register for VAT.
Flat Rate Scheme
Small businesses can opt for the Flat Rate Scheme, paying a fixed percentage of gross turnover (varying by industry, typically 9-14.5%) instead of tracking input and output VAT. This simplifies accounting but may mean paying more or less VAT depending on your expenses.
About the VAT Calculator
Value Added Tax (VAT) is a consumption tax charged on most goods and services sold in the UK. Businesses registered for VAT must charge it on their sales (output tax) and can reclaim VAT paid on business purchases (input tax). The difference is paid to or reclaimed from HMRC each quarter. Understanding VAT is essential whether you are a business owner deciding when to register, or a consumer wanting to know the true pre-tax cost of a purchase.
The standard VAT rate is 20% and applies to most goods and services. The reduced rate of 5% covers items like domestic fuel, children's car seats, and energy-saving installations. Zero-rated items (0%) include most food, children's clothing, books, and newspapers — these are technically VAT-registered supplies, meaning businesses can still reclaim input VAT. VAT-exempt items like financial services and education cannot reclaim input VAT at all.
How to Use This Calculator
- Enter an amount — either inclusive or exclusive of VAT
- Select the VAT rate (20% standard, 5% reduced, or a custom rate)
- Choose whether to add VAT to or remove VAT from the amount
- View the net amount, VAT amount, and gross total
- Use the results for invoicing, expense claims, or price comparisons
Key Facts
You must register for VAT when your taxable turnover exceeds £90,000 in any 12-month rolling period (2024/25 threshold). The Flat Rate Scheme lets small businesses pay a fixed percentage of turnover without tracking input VAT — simpler but not always cheaper. To extract VAT from an inclusive price, divide by 6 (for 20% VAT) rather than calculating 20% of the total. VAT returns are filed quarterly through Making Tax Digital software.