VAT percentages and the £90,000 line
Value Added Tax looks simple on an invoice and complicated in a business. Most day-to-day UK calculations use the standard rate of 20%, with a reduced rate of 5% for specific supplies and a zero rate for others (for example many foods and children’s clothes — categories are precise, so check notices rather than guessing). This calculator converts net amounts to gross and gross amounts back to net, then compares your taxable turnover with the registration threshold.
Registration threshold
GOV.UK currently states that you must register for VAT if your taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over £90,000 in the next 30 days. The optional deregistration threshold is £88,000. Treat these as published figures and re-check before you decide — thresholds have changed in past Budgets.
What counts as taxable turnover
Taxable turnover generally includes standard, reduced and zero-rated supplies. Exempt and out-of-scope supplies are treated differently. Distance selling, Northern Ireland acquisitions and non-established taxable persons have extra rules. If you are close to the line, read VAT Notice 700/1 or speak to an adviser rather than relying on a web calculator alone.
How to use this tool
Choose add or remove VAT, pick a rate, enter the amount, and optionally enter rolling 12-month taxable turnover. We show net, VAT and gross, then a traffic-light style hint if you are under, near or over £90,000.
Voluntary registration
You can register even below the threshold. That can help if customers are VAT-registered and you want to reclaim input VAT — but it also means charging VAT and filing returns. Cash businesses selling to consumers sometimes prefer to stay under the threshold when they can.
Worked examples
Add 20%: Net £100 → VAT £20 → Gross £120.
Remove 20%: Gross £120 → Net £100 → VAT £20.
Threshold: Taxable turnover £91,000 historically → registration obligations likely apply; diarise the deadline rules on GOV.UK.
Limitations
We do not model flat rate scheme percentages, cash accounting, partial exemption or MOSS/OSS. Educational use only for 2026 planning; not tax advice.
Standard, reduced and zero — categories matter
Calling something “food” or “clothing” is not enough. HMRC notices define when food is zero-rated versus standard-rated (for example, many catering supplies). Children’s clothing size definitions matter for zero-rating. If you sell mixed carts online, your till or shop system should map SKUs to the right rate.
Floating near £90,000
Businesses that bounce around the threshold should track taxable turnover monthly on a rolling 12-month basis. A single large invoice can create an unexpected registration duty. Diary the “next 30 days” forward-look test as well as the historic test.
Input VAT and pricing psychology
Once registered, you generally charge VAT on taxable supplies and may reclaim input VAT on eligible purchases. Consumer-facing prices often need to rise unless you absorb VAT in margins. Quote clearly whether prices are VAT-inclusive.
Schemes you might outgrow
Flat Rate Scheme, cash accounting and Annual Accounting can simplify admin for some businesses and create surprises for others. This calculator does not select schemes; it only does rate maths and a threshold hint.
Record-keeping basics
Keep valid VAT invoices, digital copies if you use Making Tax Digital for VAT, and a clear audit trail from bank to return box. MTD for VAT is separate from MTD for Income Tax — many businesses sit in both regimes for different reasons.
Worked threshold narrative
A freelance designer on £78,000 taxable turnover is under £90,000 but should watch pipeline contracts. Signing a £20,000 project expected to complete within 30 days can create an immediate registration expectation even before invoices hit the historic 12-month total.
Retailers and inclusive pricing
Consumer law and marketplace norms often expect VAT-inclusive shelf prices. Your backend still needs net and VAT columns for returns. When rates change in a Budget, update product catalogues promptly to avoid undercharging.
Bad debt relief and credit notes
Unpaid invoices and credit notes affect VAT returns under specific conditions. The percentage calculator on this page does not replace return box logic. Use your software’s VAT return workflow for filings.
Imports and overseas supplies
Import VAT, postponed VAT accounting, and overseas supplier rules sit outside a simple add/remove percentage tool. If you import stock regularly, read the import VAT pages on GOV.UK or use specialist software.
Educational purpose
Figures reflect commonly published UK VAT rates and the £90,000 registration threshold. Confirm before registration decisions; this page is not tax advice.
Making Tax Digital for VAT
Most VAT-registered businesses already submit digitally under MTD for VAT. Keep that regime conceptually separate from the Income Tax MTD checker elsewhere on WeCalculate. Threshold maths on this page only answers "might I need to register?" and "what is VAT on this amount?".
When to seek help
Partial exemption, capital goods scheme, and cross-border digital services are specialist topics. If any apply, use a VAT-literate accountant rather than a percentage widget.
Sources: Register for VAT; VAT thresholds; VAT rates.