Finance Free Apps

VAT Calculator

Follow the three simple steps stated below to figure out your VAT amount in a matter of seconds.


Introducing Zoho's VAT calculator

VAT, or Value Added Tax, is a type of consumption tax levied on the sale of goods and services in the UK since 1973. Since businesses collect VAT on behalf of the government, it is considered an indirect tax. Zoho brings you a free VAT calculator that helps you calculate VAT accurately regardless of the VAT rates.

How can you calculate VAT with this tool?

With the free VAT calculator, you can calculate the tax amount in three simple steps. The tool provides you with fields that have to be filled, and it calculates VAT automatically based on what you fill in.

  • Enter the price of the goods or services in the Enter Amount field.
  • Select the tax rate from the tax rate section. You can also provide a custom tax rate if the goods or service doesn't fall under the 5% or 20% tax slab.
  • Choose if the price that you entered is inclusive or exclusive of tax.
    • If the price you've entered is tax inclusive, the tool automatically calculates, and displays the net amount of the goods or service after subtracting the VAT.
    • If the price you've entered is tax exclusive, the tool automatically calculates, and displays the gross amount after adding the VAT.

More on VAT

Any business that buys and sells products or services in the UK market and has a taxable annual turnover of more than £85,000 must register for VAT with HMRC. Other businesses can register voluntarily, but are not required to do so. There are three different VAT rates in the UK.

  • The standard rate of VAT is currently 20% and is charged on most goods and services.
  • A reduced VAT rate of 5% is charged for children’s car seats, sanitary products, and domestic fuel or power.
  • Zero-rated goods are still VAT-taxable, but the VAT for them is 0%. You still have to record these goods in your VAT accounts and report them on your VAT return. Zero-rated goods include most food, books, newspapers and children’s clothes.

Exempt items, like postage stamps and financial and property transactions, carry a zero rate for VAT and need not be reported in your taxable turnover. Read more about the different VAT rates imposed on various goods and services.

It is important for each business to file an accurate VAT return and repay the VAT it has collected to HMRC. Learn more about VAT.

Zoho Books does more than just calculating VAT

Zoho Books, a VAT-compliant accounting platform, helps businesses create VAT invoices, manage their finances, file tax returns directly, generate detailed reports, and much more. Learn how Zoho Books can be the right fit for your business.

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