VAT calculator:
easily add or remove VAT online

Enter your amount, select the VAT rate, and get instant results with FreshBooks’ handy VAT calculator. Simplify your tax calculations and ensure accuracy for your business.

VAT amount:

£0.00

Total:

£0.00

What is VAT?

Value Added Tax (VAT) is a consumption tax applied to most goods and services in the UK. It’s a crucial part of the UK’s taxation system, affecting businesses by requiring them to collect tax on sales and account for it to HM Revenue and Customs (HMRC).
The standard rate of VAT applies to most goods and services in the UK, and it is important for businesses to understand this rate for accurate pricing and tax calculations. Learn more about How Does VAT Work: An Overview.

How does the FreshBooks VAT calculator work?

Enter the amount

Start by inputting the amount you want to calculate into the FreshBooks VAT calculator.

Select the VAT rate

Choose the appropriate VAT rate from the provided options.

Choose the calculation type

Indicate whether you want to add VAT to the amount or remove it. When adding VAT, the calculator will incorporate the VAT into the net amount, providing you with the total price including VAT.

View the results

The calculator will instantly display the VAT amount and the total.

Loan terms and interest rates

Understanding the terms and interest rates associated with the loan is crucial for evaluating its overall cost and affordability. These factors significantly impact your repayment schedule and the total amount you'll pay over the life of the loan.

Adding VAT

STEP 1

Decide if you’re using the standard 20% rate, or reduced 5% rate of VAT

STEP 2

Standard rate – multiply the price by 1.2 = net + VAT price. £50 X 1.2 = £60

Reduced rate – multiply the price by 1.05 = net + VAT price. £50 X 1.05 = £52.50

STEP 3

The result of these calculations is your gross price, including VAT. At the standard rate, this means a £50.00 item becomes £60, with added VAT. And £52.50, if you apply the reduced VAT rate.

Deducting VAT

STEP 1

Define which VAT rate is being used – 20% or 5%, standard or reduced rate

STEP 2

To work out a price excluding VAT, you divide your price by either 1.2 or 1.05, depending on the applicable VAT rate

Standard rate: Price / 1.2 = net price £54 / 1.2 = £45

Online VAT calculator example

Net Amount	20% VAT	5% VAT
200	240	210
500	600	520
1000	1200	1050

This table illustrates how the FreshBooks VAT calculator simplifies calculations for both the standard (20%) and reduced (5%) VAT rates. By entering the net amount, the tool instantly provides the corresponding VAT-inclusive totals.

What are the VAT rates in the UK?

The UK has several VAT rates:

VAT rate	Pourcentage	Applies to
Standard rate	20%	Most goods and services, like electronics and home essentials, fall under this category.
Reduced rate	5%	Applies to specific items such as children’s car seats and energy-saving products. The reduced VAT rate is significant for items like health products and certain residential property renovations.
Zero rate	0%	Covers essential goods and services like most food items and children’s clothing.

The rate of VAT is applied differently depending on the type of goods and services, with the standard rate, reduced rate, and zero rate each serving specific categories.

Who needs to pay VAT?

Businesses must register for VAT if their turnover exceeds the current VAT threshold, which is £85,000. Once registered, businesses are obligated to charge VAT on their sales, submit VAT returns to HMRC, and pay any VAT owed. Additionally, businesses may also need to consider the implications of dividend tax on their income.