UK VAT calculator

How this is worked out

• VAT rates: standard rate 20% (most goods and services), reduced rate 5% (for example children's car seats and home energy), zero rate 0% (for example most food and children's clothes). Some things are exempt, such as postage stamps and financial and property transactions. The standard rate has been 20% since 4 January 2011.
• Adding VAT: VAT = net × rate. At 20%, gross = net × 1.2.
• Removing VAT: VAT = gross × the VAT fraction, which is rate ÷ (100 + rate): 1/6 at 20%, 1/21 at 5%. Net = gross − VAT, so the three figures always add up.
• Rounding: "Nearest penny" rounds the VAT half up (0.5p goes up). HMRC lets invoice traders round the total VAT on an invoice down to a whole penny, but retailers must not round VAT down (they can round up and down), so pick the option that fits how you invoice. The unrounded VAT is shown too.
• Registration threshold: you must register if your taxable turnover for the last 12 months goes over £90,000, or you expect it to go over £90,000 in the next 30 days alone. You can ask to cancel your registration if it falls below £88,000.
• Deadlines: gone over in the last 12 months: register within 30 days of the end of the month you went over, effective from the first day of the second month after. Next 30 days: register by the end of that 30-day period, effective from the date you realised.

Sources: VAT rates, VAT thresholds, Register for VAT, VAT Notice 700/1, VAT Notice 700 (paragraphs 7.3.1 and 17.5 to 17.6). Checked 17 October 2026. General guidance only, not tax advice.

Worked examples

• Add 20% VAT: a £250 job before VAT. VAT = £250 × 20% = £50.00, so you invoice £300.00.
• Remove 20% VAT: a £99.99 price including VAT. VAT = £99.99 × 1/6 = £16.665, which rounds to £16.67, leaving £83.32 net. Rounding the VAT down instead gives £16.66 VAT and £83.33 net.
• GOV.UK's own example: something sold for £2.40 including 20% VAT has 40p of VAT in it. That's one-sixth of £2.40, not 20% of it.
• Remove 5% VAT: a £210 home energy bill at the reduced rate. VAT = £210 × 1/21 = £10.00, net £200.00.
• Threshold, under: £7,000 of taxable sales every month for 12 months is £84,000: £6,000 of headroom. Next month the oldest £7,000 drops out, so you could take up to £13,000 that month before the rolling total goes over £90,000.
• Threshold, over (GOV.UK example): your 12-month turnover first goes over £90,000 in July. You must register by 30 August, and your effective date of registration is 1 September.

VAT and the £90,000 threshold: a short guide

VAT is a tax added to most goods and services sold by VAT-registered businesses. Once you're registered you charge VAT at the right rate on your sales, reclaim the VAT you pay on business purchases, and send HMRC a VAT return, usually every 3 months. You pay the difference between the VAT you charged and the VAT you paid, and if you paid more than you charged, HMRC usually repays you.

Adding and removing VAT

To add VAT, multiply the net price by the rate: at 20%, multiply by 1.2. To remove VAT from a price that already includes it, don't take 20% off. The VAT is one-sixth of a 20% price, and one twenty-first of a 5% price. Taking 20% off £120 gives £96, but the right net figure is £100.

When you have to register

The VAT threshold isn't based on the tax year. At the end of every month, add up your taxable turnover for the last 12 months. If it's over £90,000, you must register. It counts standard, reduced and zero-rated sales, but not VAT-exempt or out-of-scope ones, and VAT Notice 700/1 says you don't include the sale of capital assets such as equipment or vehicles. Separately, if at any time you expect more than £90,000 of taxable turnover in the next 30 days alone, for example from one big contract, you must register straight away.

If you register late, you must pay VAT on any sales since the date you should have registered, and you might have to pay a penalty. Until your VAT number arrives you can't show VAT on invoices, but GOV.UK says you can raise your prices to cover the VAT you'll owe, then reissue the invoices once you have the number.

Over temporarily, or under the threshold

If you went over because of a one-off and can show HMRC your taxable supplies won't go over £88,000 in the next 12 months, you can apply for an exception from registration. You can also choose to register voluntarily if your turnover is below £90,000; you then pay HMRC any VAT you owe from the date they register you. Once registered, if your taxable turnover falls below £88,000 you can ask HMRC to cancel your registration.

This guide covers businesses based in the UK. There are different rules if you're based outside the UK, sell between Northern Ireland and the EU, take over a VAT-registered business or only sell exempt goods and services. General guidance only, not tax advice.

FAQ

What are the UK VAT rates?
There are three: the standard rate of 20% for most goods and services, the reduced rate of 5% for some things such as children's car seats and home energy, and the zero rate of 0% for things such as most food and children's clothes. Some things are exempt from VAT altogether, such as postage stamps and financial and property transactions.

How do I work out the VAT in a price that already includes VAT?
Multiply the VAT-inclusive price by the VAT fraction, which is the rate divided by 100 plus the rate. At 20% that's 1/6, so £120 includes £20 of VAT and £100 net. At 5% it's 1/21. Don't just take 20% off the price: that gives the wrong answer.

What is the VAT threshold for 2026-27?
The VAT registration threshold is £90,000 of taxable turnover, and the deregistration threshold is £88,000. These have applied since 1 April 2024 and GOV.UK lists them as the current thresholds.

Is the VAT threshold based on the tax year?
No. It's a rolling 12 months: at the end of each month, add up your taxable turnover for the last 12 months, and if it's over £90,000 you must register. You must also register if you expect your taxable turnover in the next 30 days alone to be over £90,000.

When do I have to register after going over £90,000?
Within 30 days of the end of the month you went over. Your effective date of registration is the first day of the second month after. GOV.UK's example: if your 12-month turnover first goes over in July, register by 30 August, with an effective date of 1 September. If you expect to go over in the next 30 days alone, register by the end of that 30-day period, effective from the date you realised.

Do zero-rated sales count towards the VAT threshold?
Yes. Taxable turnover includes zero-rated, reduced-rated and standard-rated sales. It doesn't include sales that are VAT exempt or outside the scope of VAT, and VAT Notice 700/1 says you don't include the sale of capital assets such as buildings, equipment or vehicles.

Should VAT be rounded up or down?
HMRC's VAT guide lets businesses that issue VAT invoices round the total VAT on an invoice down to a whole penny. If you work out VAT line by line you can round down to the nearest 0.1p, or to the nearest 1p or 0.5p, as long as you're consistent. Retailers must not round VAT down, but can round each calculation up or down.

Getting close to £90,000?

Put money aside for tax as you go and keep an eye on the dates. These free Tidy Sheets tools help:

Free tax set-aside calculator

Chasing an unpaid invoice? Use the late payment interest calculator. Paying yourself from a limited company? Try the dividend tax calculator and the take-home pay calculator. Small side income? See the £1,000 trading allowance calculator. Every Self Assessment and Making Tax Digital date is in the free UK tax deadlines calendar, and developers can get these VAT rates as JSON from the free UK tax rates API. Browse more spreadsheets in the shop.

Official sources

VAT rates (GOV.UK)
Rates of VAT on different goods and services (GOV.UK)
How VAT works (GOV.UK)
VAT thresholds (GOV.UK)
Register for VAT: when to register (GOV.UK)
Cancel your VAT registration (GOV.UK)
Who should register for VAT: VAT Notice 700/1 (GOV.UK)
VAT Notice 700/1 supplement: current and past thresholds (GOV.UK)
VAT guide: VAT Notice 700 (GOV.UK)
Apply for an exception from registering for VAT (GOV.UK)
Late registration penalty: VAT Notice 700/41 (GOV.UK)

All checked on 17 October 2026. General guidance only, not tax advice: check GOV.UK or an accountant for your own situation.