Online VAT Calculator

You can charge your customers VAT as soon as you become VAT registered. It is mandatory to register for VAT when your turnover reaches £90,000 a year, otherwise it is totally up to you.

Find out more in our blogpost – When and how should I register for VAT

VAT is calculated on net value, after you add VAT tax to your net value it becomes a gross value

Yes – you can work out the original cost if you only know the VAT amount.

If a product costs £100 and you apply a standard VAT rate of 20% to it, the amount of VAT will be £100 x 0.2 = £20

Let’s say you don’t know the cost of the product X, but you know that the VAT paid was £20, the formula will be 0.2X=£20, therefore X=£20/0.2, X=£100

VAT Flat Rate Scheme (FRS) is a simplified method of accounting for VAT which is convenient for small businesses. Instead of calculating and reclaiming the VAT on each purchase and sale separately, you simply pay a fixed percentage of your business’s turnover to HMRC. The flat rate percentages range from 4% to 14.5%, depending on the business sector. We have a blogpost that explains it in detail.

You will need to organise your sales and purchases in different rows and net value, added VAT and gross value in rows. Here is a link to our blogpost that explains it in detail.

A reverse VAT calculator (or VAT backwards calculator) extracts the original amount before VAT from a price that already includes VAT. It's useful when you need to:

• Determine how much VAT you've paid on purchases for expense claims
• Separate net amounts from VAT on invoices for accounting purposes
• Set pre-VAT prices based on desired final selling prices

To use this feature, simply enter your gross amount, select 'Remove VAT', and choose your VAT rate. For example, with £240 including 20% VAT, the calculation gives you £200 net value and £40 VAT.

Understanding the different VAT calculation formulas helps ensure accurate tax reporting:

Calculation	Formula
To add VAT to Net Amount	Net × (1 + VAT rate) = Gross
To extract VAT from Gross Amount	Gross ÷ (1 + VAT rate) = Net
VAT Amount from Net	Net × VAT rate = VAT
VAT Amount from Gross	Gross × (VAT rate ÷ (100 + VAT rate)) = VAT

The VAT reverse charge means the buyer, instead of the seller, is responsible for reporting VAT on a transaction. Normally, the supplier will charge VAT on goods or services sold, however, in this case the seller does not add VAT to the invoice, and the buyer records both the VAT they would have paid and the VAT they can reclaim. This system helps prevent tax fraud and is used in certain industries like construction and electronics and reduces the administrative burden for international suppliers.