Sole-trader consultant, £60,000 net annual fees
Inputs: Net £60,000 · Standard Scheme · 20% rate · Quarterly returns
Result: VAT on sales: £12,000.00/year · £3,000.00/quarter. Below the £90,000 registration threshold — VAT registration optional.
UK VAT · Making Tax Digital ready
UK VAT calculator with HMRC-linked sources
Calculate UK VAT under the Standard Scheme or the Flat Rate Scheme. Every rate and threshold below carries a HMRC source URL and a "last reviewed" date. Save your calculation to prepare a Making-Tax-Digital-compatible VAT return — the only UK VAT calculator with a maintained audit trail of its own source data.
Worked examples
Three concrete scenarios with exact pence outputs. Every figure is reproducible by entering the same inputs into the calculator above.
VAT-registered freelance designer, £108,000 gross
Inputs: Gross £108,000 · Standard Scheme · 20% rate · Quarterly
Result: Net: £90,000.00 · VAT due: £18,000.00/year · £4,500.00/quarter. Sits exactly on the registration threshold; VATLY flags it as "near" — review quarterly.
Limited Cost Trader on Flat Rate, £96,000 gross (year 1)
Inputs: Gross £96,000 · Flat Rate Scheme · 16.5% · First-year discount (15.5%)
Result: FRS VAT: £14,880.00/year. Compare to Standard's £16,000.00 — FRS year-1 advantage is £1,120.00, but year 2 the advantage shrinks to £128.00. Reconsider before year 2.
UK VAT rates and thresholds (2025/26)
Every row links to the HMRC page it derives from. Reviewed 2026-05-12; the next quarterly audit is due 2026-08-12.
| Item | Value | Source | Last reviewed |
|---|---|---|---|
| Standard rate | 20% | HMRC — VAT rates | 2026-05-12 |
| Reduced rate | 5% | HMRC — VAT rates | 2026-05-12 |
| Zero rate | 0% | HMRC — VAT rates | 2026-05-12 |
| Registration threshold | £90,000 | HMRC — Register for VAT | 2026-05-12 |
| Deregistration threshold | £88,000 | HMRC — Register for VAT | 2026-05-12 |
| Flat Rate Scheme — Limited Cost Trader | 16.5% | HMRC — Flat Rate Scheme (VAT Notice 733) | 2026-05-12 |
| Flat Rate Scheme — first-year discount | -1% for 12 months | HMRC — Flat Rate Scheme (VAT Notice 733) | 2026-05-12 |
| MTD threshold | £90,000 (mandatory from 2022; voluntary below) | HMRC — Making Tax Digital for VAT | 2026-05-12 |
Standard Scheme vs Flat Rate Scheme — quick decision
| Question | Standard Scheme | Flat Rate Scheme |
|---|---|---|
| What rate do you charge? | 20% on sales (or 5% / 0% by category) | Sector rate on VAT-inclusive turnover (most: 14.5%; Limited Cost Trader: 16.5%) |
| Reclaim input VAT on purchases? | Yes — most business purchases | No — except single capital purchases over £2,000 (gross) |
| Best fit | Businesses with significant VAT on purchases | Service-only businesses with low VAT-able costs |
| First-year benefit | None inherent | -1% on sector rate for 12 months |
| Source | Source: HMRC — VAT rates · Last reviewed 2026-05-12 | Source: HMRC — Flat Rate Scheme (VAT Notice 733) · Last reviewed 2026-05-12 |
Frequently asked questions
How do you calculate UK VAT?
For the Standard Scheme, multiply the net amount by the VAT rate (currently 20% for most goods and services). To go from a gross amount to net, divide by 1.2. VATLY uses integer-pence arithmetic and HMRC-banker's rounding throughout, so totals reconcile to the penny.
What is the UK VAT registration threshold for 2025/26?
£90,000 of VAT-taxable turnover in any rolling 12-month period. You must also register if you expect to cross the threshold in the next 30 days alone. The threshold is set by HMRC and last reviewed by VATLY on 2026-05-12.
What's the difference between the Standard Scheme and the Flat Rate Scheme?
Standard charges 20% on sales and lets you reclaim VAT on most business purchases. Flat Rate applies a sector-specific lower rate (most freelancers: 14.5% or 16.5% as Limited Cost Traders) to your VAT-inclusive turnover and you generally cannot reclaim input VAT. Flat Rate is simpler but can cost more if you have significant deductible expenses.
What is the Limited Cost Trader rate?
16.5% — applied to your VAT-inclusive turnover if your goods cost less than 2% of turnover (or under £1,000/year). Most service-only freelancers fall into this category, which often makes Flat Rate worse than Standard. VATLY's calculator tests both schemes side-by-side.
Can VATLY save my calculation for later?
Yes. Click "Save to VATLY" after running the calculator and you'll get a magic-link sign-in (no password). The figures are stored against your account so you can compare scenarios over time and prepare a Making-Tax-Digital-compatible VAT return draft.
How often does VATLY update its VAT rates?
Every rule row carries a "last reviewed" date and a HMRC source URL. A daily background job flags any row older than 90 days for editorial review. See our editorial methodology page for the full process.
Does the calculator account for the first-year Flat Rate discount?
Yes. New Flat Rate registrants get a 1% reduction on their sector rate for the first 12 months. Toggle the option on the calculator and the result updates with the discount applied — the formula breakdown shows both the headline rate and the discounted rate explicitly.
Is the VAT figure I get the amount I owe HMRC?
The Standard Scheme figure is your output VAT (VAT on sales) minus the input VAT you've reclaimed. The calculator shows output VAT only — your final liability depends on the purchases you reclaim on. Save the calculation to start tracking input VAT separately.
How we maintain this calculator
Every rate, threshold and rule on this page comes from a typed row in our rules engine. Each row carries an HMRC source URL, an "applies from" date, and a "last reviewed" date. A background job flags any row not reviewed in 90 days for an editor's queue.