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FreshBooks Value Added Tax (VAT) Calculator

Take the effort out of VAT calculations with FreshBooks free VAT calculator

Download Your VAT Guide
20% Regular
5% Reduced
VAT amount: £00.00
Total: £00.00
20% Regular
5% Reduced
VAT amount: £00.00
Total: £00.00

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business owners have saved up to £5,000/year on accounting costs with FreshBooks

Try it free for 30 days. No credit card required. Cancel anytime.

What Is a VAT Calculator?

A VAT Calculator quickly adds or subtracts VAT from any amount. A multi-step calculation becomes a couple of clicks. You don’t need to know the formulas for adding or extracting VAT anymore. And you can forget the percentages element too – the calculator does it all for you.

How to Calculate VAT

Without the FreshBooks VAT calculator, you need to work out your VAT manually – like this:

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  Reduced rate: Price / 1.05 = net price £54 / 1.05 = £51.43

Thankfully, FreshBooks VAT Calculator Works Out Prices With or Without VAT for You

Adding VAT
Type in your price For example: Without VAT, the price of your item is £20.00
Select the correct VAT percentage For example: You pay the Standard Rate of VAT at 20%
Click ‘Add VAT’ For example: VAT = 20% of £20.00 = £4.00 Price + VAT = £20 + £4.00 = £24.00 
Deducting VAT
Type in the amount, including VAT For example: With VAT, the price is £30.00
Choose your VAT rate For example: Standard Rate of VAT at 20% applies
Click ‘Remove VAT’ For example: VAT = 20% of £30.00= £5.00 Price without VAT is £30.00 – £5.00 = £25.00

Of all the VAT calculators available, FreshBooks’ is the most user-friendly design. Simple, time-saving tech at its best. And wait till you see how much more time FreshBooks will save you on other admin and accounting tasks.

How Much Is VAT in the UK?

HMRC organises all goods and services into 5 different VAT rates, so you can easily check. We’ve got a handy guide to support you here.

But there are only two rates that alter the cost:

Standard Rate of 20%:

Applies to most goods and services in the UK

Reduced Rate of 5% :

Applies to specific things, like domestic fuel and particular situations

Confusingly, there are also Zero-rated goods and services which must be reported as taxable. But you apply 0% VAT to their price, so you don’t need the VAT calculator.

Confusingly, there are also Zero-rated goods and services which must be reported as taxable. But you apply 0% VAT to their price, so you don’t need the VAT calculator.

Despite the intricacies of the regulations, FreshBooks Making Tax Digital Software makes recording and reporting your VAT very straightforward. 

Why Business Owners Love Freshbooks

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Save up to 553 hours each year by using FreshBooks

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Save up to £5000 in billable hours every year

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People in over 160 countries have used FreshBooks

Try it free for 30 days. No credit card required. Cancel anytime.

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