VAT Calculator
Enter amount and VAT rate to calculate VAT
Understanding UK VAT 2026/27
Value Added Tax (VAT) is a consumption tax charged on most goods and services in the UK. Our VAT calculator helps businesses and individuals calculate VAT at the correct rate, whether you need to add VAT to a net amount or extract VAT from a gross amount. Understanding VAT calculations is essential for invoicing, VAT returns, and business financial planning.
The UK operates three main VAT rates: the standard rate of 20% applies to most goods and services, the reduced rate of 5% applies to specific items like domestic energy, and the zero rate (0%) applies to essentials like most foods and children's clothing. Some items are VAT-exempt, meaning no VAT is charged and input VAT cannot be reclaimed.
VAT registration becomes mandatory when your taxable turnover exceeds £90,000 in a 12-month period. Once registered, you'll charge VAT on your sales (output VAT) and can reclaim VAT on business purchases (input VAT), paying the difference to HMRC through quarterly VAT returns.
VAT Calculation Examples 2026/27
Adding Standard VAT
Calculation: £1,000 × 0.20 = £200 VAT
Extracting Standard VAT
Calculation: £1,200 ÷ 1.20 = £1,000 net
Adding Reduced VAT
Calculation: £500 × 0.05 = £25 VAT
UK VAT Rates & Categories 2026/27
Standard Rate (20%)
- • Most goods and services
- • Professional services
- • Restaurant meals
- • Electronics and clothing
- • Construction services
Reduced Rate (5%)
- • Domestic fuel and power
- • Energy-saving materials
- • Children's car seats
- • Some medical equipment
- • Sanitary products
Zero Rate (0%)
- • Most food and drink
- • Books and newspapers
- • Children's clothes and shoes
- • Prescription medicines
- • Exports outside the UK
VAT Registration & Returns Guide
When to Register for VAT
- Mandatory: Turnover exceeds £90,000 in 12 months
- Voluntary: Register below threshold for benefits
- Deadline: Register within 30 days of exceeding threshold
- Retrospective: Can backdate registration up to 4 years
VAT Return Deadlines
- Quarterly returns: Due 1 month 7 days after quarter end
- Annual returns: Available if VAT liability under £1,350
- Monthly returns: Required for some businesses
- Making Tax Digital: Submit online using compatible software
VAT Management Tips
Input VAT Recovery
- • Keep all VAT receipts and invoices
- • Claim input VAT on business purchases
- • Cannot reclaim VAT on entertainment expenses
- • Motor expenses have special rules
- • Mixed-use items need apportionment
Record Keeping
- • Maintain records for 6 years
- • Use Making Tax Digital compatible software
- • Keep sales and purchase invoices
- • Track imports and exports
- • Document business mileage for motor expenses
Special VAT Schemes
| Scheme | Eligibility | Benefits |
|---|---|---|
| Flat Rate Scheme | Annual turnover under £150,000 | Simplified calculations, reduced admin |
| Cash Accounting | Annual turnover under £1.35m | Pay VAT when paid, not when invoiced |
| Annual Accounting | Annual turnover under £1.35m | One annual return instead of quarterly |
Frequently Asked Questions
How do I calculate VAT on my invoices?+
What are the current UK VAT rates for 2026/27?+
When do I need to register for VAT?+
How often do I need to submit VAT returns?+
Can I reclaim VAT on business expenses?+
What's the difference between VAT inclusive and exclusive prices?+
Do I charge VAT on exports and international sales?+
What records do I need to keep for VAT?+
Related Tax Calculators
VAT is only one part of business tax, so these tools connect sales tax with profit, payroll and trading structure. use the corporation tax calculator for company profit, use the self-employed tax calculator for sole-trader income and use the employer NI calculator if payroll is part of the business cost.