Online VAT calculator / Backwards VAT calculator / Remove VAT calculator

Sunday, February 9th, 2020 in: Advice

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Online VAT calculator UK / VAT backwards / VAT formula / Remove VAT calculator

Welcome to our online vat-calculator. This is designed to make the VAT inclusive and exclusive calculation as easy as possible. Forget all about fractions and having to use math, simply pop the total invoice or receipt value excluding VAT below and we will do the rest. Like magic!

The main UK VAT rates are 0% VAT, 5% reduced rate VAT and standard rate VAT which is 20%.

VAT calculator backwards / Remove VAT calculator

This online VAT calculator enables you to calculate VAT backwards or remove VAT from a total that already includes UK VAT.

We are also going to be creating a VAT flat rate calculator very soon.

Remove VAT calculation examples

if you bought something that was £1200 including VAT then you may wish to remove the VAT element from this total to claim back the VAT on your VAT return. The VAT fraction or formula is 20/120 or 1/6th. This means that £1200 x 20/120 or 1/6 is £200. If you wanted to test this then what you are left with after VAT is £1000. If you add on 20% VAT, £200 then it comes back to the VAT inclusive total or gross VAT amount of £1200.

VAT is known as Value Added Tax. In some countries around the world, it may be referred to as sales tax. The UK VAT system is designed so that the end consumer essentially pays the VAT. From a business perspective, for a UKL VAT-registered sole trader or limited company you only end up paying VAT to HMRC on the value you’ve added. VAT can be extremely complicated as there are many different VAT schemes and rules for different circumstances. The good news is that we have designed this nice and easy to use VAT calculator for small business owners that may be on the go or don’t have time for manual calculations. You can learn more about the UK VAT rules here.

If you would like some advice on VAT in the UK then feel free to contact us on 01242 528412 or simply pop us an email to hello@cheltenhamtaxaccountants.co.uk

What is VAT?

VAT stands for ‘Value Added Tax’. Ultimately VAT is paid by the consumer when purchasing products or services. Not all goods and services have VAT on them such as food essentials and children’s clothing which are zero rated. Generally luxury products will have VAT on them such as ice cream and fizzy drinks or meals at a restaurant.

Too many people VAT is simply a stealth tax. However unlike income tax it can be prevented because it is only incurred when you spend money.

Do all businesses need to register for VAT?

Not all businesses need to register for VAT. There is an annual registration threshold of £85,000. This means that unless your turnover reaches £85,000 in any 12 month rolling period you will not be required to register for VAT on a compulsory basis. In some cases it can be beneficial to register for VAT on a voluntary basis such as when all of your income is business to business. In this instance your customer can usually Reclaim the VAT back and it does not affect your margin on your selling price. However, it will then entitle you to claim back the VAT on your expenses.

If I am required to register for VAT because I’ve gone over the limit do I need to pay VAT on all of my previous sales?

No, if you have gone over the VAT threshold you will only be required to charge and pay VAT on sales after the date of VAT registration. This is quite a common concern of new businesses that are worried they would have to pay backdated VAT, however this is not the case.

About Cheltenham Tax Accountants

We are a firm of accountants based in Cheltenham, Gloucestershire yet serving the UK. Our expertise is in saving you tax and VAT whether you are an individual or business owner. We pride ourselves on being the most approachable accountants (probably in the UK) and treating our clients as real people, not just a number. You will not find any boring, jargon speaking stereotypical accountants in our business! Get in touch now.