UK VAT Calculator 2025/26: Add, Remove, Flat Rate & Quarterly

The standard UK VAT rate is 20%. A reduced rate of 5% applies to domestic energy, children's car seats and some health goods. Zero-rated VAT (0%) applies to most food, books, newspapers and children's clothing. Some supplies are exempt (e.g. most financial services, insurance, education) — these are not the same as zero-rated.

To remove 20% VAT, divide the gross price by 1.20. For 5% VAT, divide by 1.05. Example: a £600 inc-VAT invoice ÷ 1.20 = £500 net + £100 VAT.

You must register once your VAT-taxable turnover over any rolling 12-month period exceeds £90,000 (threshold from 1 April 2024). You must register within 30 days of the end of the month you went over. Voluntary registration below the threshold is also allowed — useful if most of your sales are to VAT-registered businesses.

The Flat Rate Scheme (FRS) pays HMRC a fixed % of your gross turnover, saving admin and (sometimes) money. You can't reclaim input VAT on most purchases. Service businesses with low costs used to benefit most — until HMRC introduced the 16.5% "limited cost trader" rate, which removes the benefit for most. The calculator runs both numbers side-by-side for your sector.

Yes. Since April 2022, every VAT-registered UK business — regardless of turnover — must keep digital records and submit VAT returns using MTD-compatible software (e.g. Xero, QuickBooks, FreeAgent, Sage). Spreadsheet-only filing is no longer allowed.

Under Standard accounting, you owe VAT to HMRC when you raise an invoice — even if the customer hasn't paid yet. Under Cash Accounting, you only owe VAT once the customer actually pays. Cash is helpful if customers are slow payers; it's available if your turnover is ≤ £1.35m.