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A.X.E.L
Free Tool · 2025/26

VAT Calculator

Add VAT to a net amount or remove VAT from a gross amount instantly. Supports standard (20%), reduced (5%), and zero rates.

📊 Should I Register for VAT?

Enter your numbers below and we'll tell you whether VAT registration would save or cost you money — plus compare Standard vs Flat Rate Scheme.

Commercial 50%Residential 50%

Should You Register for VAT?

In the UK, you must register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period. But should you register before you hit that threshold? Here's what tradesmen need to know.

Pros of voluntary VAT registration: You can reclaim VAT on business purchases — tools, materials, vehicle costs, even your phone bill. If you spend a lot on materials, this can be significant. It also makes your business look more established to commercial clients.

Cons of VAT registration: You must charge VAT on top of your prices, which makes you effectively 20% more expensive for residential customers who can't reclaim it. You also need to submit quarterly VAT returns and keep detailed records. There's more admin, though software like A.X.E.L can handle most of it.

The bottom line: If most of your work is for VAT-registered businesses (commercial clients, main contractors), registering early usually makes sense — your clients reclaim the VAT anyway, and you get to reclaim yours. If your customers are mainly homeowners, hold off until you have to.

How VAT Works for UK Tradesmen

Value Added Tax (VAT) is a tax on goods and services charged at each stage of production. As a VAT-registered tradesman, you charge VAT on your invoices and pay it to HMRC quarterly, minus any VAT you've paid on business purchases.

Most construction and trade services are charged at the standard 20% rate. Some work qualifies for the reduced 5% rate — for example, installing energy-saving materials in residential properties, or converting a non-residential building to residential use. New-build housing is zero-rated.

Standard vs Flat Rate Scheme: The standard scheme means tracking VAT on every invoice and expense — you charge 20%, reclaim what you've paid, and pay the difference to HMRC. The Flat Rate Scheme simplifies this: you pay a fixed percentage of your gross turnover (typically 9.5% for construction trades) and skip the expense tracking. The trade-off is you can't reclaim VAT on most purchases. If you buy a lot of materials, standard usually wins. If you're mostly labour, Flat Rate might save you money and admin time.

This calculator helps you quickly work out VAT in both directions: adding VAT to a net amount for your invoices, or extracting VAT from a gross amount to see the breakdown. The registration analyzer compares both schemes for your specific situation, using the current UK VAT rates and flat rate percentages.

Frequently Asked Questions

You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month rolling period (the threshold for 2025/26). You can also register voluntarily if you're below this threshold. Once registered, you must charge VAT on your invoices and submit quarterly VAT returns to HMRC.
The standard VAT rate is 20% and applies to most goods and services. A reduced rate of 5% applies to certain items like home energy and children's car seats. Some items are zero-rated (0%), including most food, children's clothing, and new-build housing.
It depends. Voluntary registration lets you reclaim VAT on business purchases (tools, materials, vehicles), which can save money if you buy a lot. However, it means charging VAT to customers, which could make you less competitive if your customers can't reclaim VAT themselves (e.g. residential customers). For commercial/trade clients, it usually makes no difference.
The Flat Rate Scheme simplifies VAT for small businesses (under £150,000 turnover). Instead of tracking VAT on every purchase, you pay a fixed percentage of your gross turnover — the rate depends on your trade. For general construction it's 9.5%. It's simpler but not always cheaper.
To add VAT at 20%: multiply the net price by 1.2. To remove VAT from a gross price: divide by 1.2 to get the net amount, or divide by 6 to get the VAT amount. This calculator does both automatically — just choose your direction and enter the amount.
Standard VAT means you track every purchase and reclaim VAT on expenses. Flat Rate means you pay a fixed % of gross turnover and skip the paperwork — but you can't reclaim VAT on most purchases. If your expenses are high (lots of materials), standard usually wins. If you're mostly labour with few purchases, Flat Rate can save money and time. Use the analyzer above to compare for your situation.
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Managing your taxes shouldn't be this hard.

Try A.X.E.L — built for tradesmen. Invoicing with VAT, expense tracking, and integrations with Xero and QuickBooks.

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