Flat rate VAT calculator
Pick your HMRC sector, enter the quarter's gross turnover and see the VAT to pay, what stays in the business and how the standard scheme compares.
Guide
How to use it
- Enter the period's turnover including VAT, the flat rate applies to the gross.
- Pick your sector; the HMRC percentage shows in the dropdown. Spending under 2% of turnover on goods? Choose limited cost business.
- Toggle the first-year discount if you registered within the last 12 months.
- Compare the pay figure with the standard-scheme tile before drawing conclusions, then verify rates and eligibility at gov.uk.
Examples
Worked examples
14.5% of £30,000 gross = £4,350 to HMRC. The £5,000 charged to clients leaves £650 in the business, before remembering input VAT is mostly gone.
Same contractor, newly registered: 13.5% = £4,050, a £300 saving per quarter for the first year.
A consultant buying almost no goods must use 16.5%: £4,950 on the same turnover, only £50 kept. At that rate the scheme is about simplicity, not profit.
Method
How it works
Flat rate VAT is sector percentage × gross turnover. The comparison tile shows 20⁄120 of the same turnover, what a fully standard-rated business would hand over before reclaiming inputs, so the gap between the two is the scheme's headline benefit, and the input VAT you forgo is its cost.
The sector table lives in this page as one editable constant, with rates as published at 8 August 2026. Scheme rules, eligibility and rates change: verify at gov.uk, and treat this as arithmetic, not advice.
FAQ
Frequently asked questions
How does the flat rate scheme work?
You charge customers 20% VAT as normal but pay HMRC a fixed percentage of your gross turnover instead of accounting for every input. The difference is yours, in exchange for giving up most input VAT reclaims.
What is my sector's percentage?
HMRC publishes a rate per business type, from 4% for food retail to 16.5% for limited cost businesses. The calculator lists the common ones; check gov.uk for the full table and your exact category.
What is a limited cost business?
One spending under 2% of turnover (or under £1,000 a year) on goods. It must use 16.5% regardless of sector, which removes most of the scheme's benefit for service businesses with few purchases.
What is the first-year discount?
A 1% reduction on your sector rate for the first year after VAT registration. The calculator has a toggle for it.
Is the flat rate scheme worth it?
It depends on how much input VAT you would otherwise reclaim. The comparison tile shows the standard-scheme figure so you can see the gap; a business with big equipment purchases usually does better on the standard scheme.
Who can join the scheme?
Businesses expecting VAT-exclusive turnover of £150,000 or less in the next year, with exit once gross income passes £230,000. Thresholds change, verify at gov.uk before deciding anything.
More tools