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UK VAT Calculator (2026/27)

Two tools in one. (1) Check if your turnover crosses the £90,000 VAT registration threshold. (2) Compare standard VAT vs the Flat Rate Scheme (FRS) for your trade — with automatic Limited Cost Trader detection.

1. VAT registration threshold check

Rolling 12-month turnover
VAT registration threshold£90,000
Headroom remaining
Deregistration threshold£88,000

Threshold figures verified against gov.uk/how-vat-works/vat-thresholds. Consult HMRC or your accountant before acting.

2. Standard VAT vs Flat Rate Scheme

Enter your VAT-inclusive turnover, your goods spend (VAT-inclusive), and pick your trade. We'll show whether the FRS saves or costs you money — and whether you're a Limited Cost Trader (LCT), where the 16.5% rate usually wipes out the benefit.

VAT to pay under standard VAT
VAT to pay under FRS
Your sector rate
Goods spend / turnover
Limited Cost Trader detected. Your goods spend is below the LCT threshold (under 2% of turnover OR under £1,000/yr). HMRC forces a 16.5% FRS rate which usually wipes out FRS benefit. Most pure-service consultants fall into this trap.

FRS rates from gov.uk/vat-flat-rate-scheme/how-much-you-pay. Excludes capital assets ≥£2,000 (separately reclaimable under FRS). Always verify with HMRC or your accountant before changing schemes.

Track receipts properly so the numbers above are real

Garbage in, garbage out. PocketReceipt scans receipts, extracts VAT, flags duplicates, and exports HMRC-aligned summaries — so the goods/expense figures you plug in here are accurate.

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How the £90,000 threshold actually works

The VAT registration threshold is £90,000 — but it's measured on a rolling 12-month basis, not a tax year. You must register if either:

  • Your taxable turnover in the past 12 months has just gone over £90,000, OR
  • You expect your turnover in the next 30 days alone to go over £90,000 (this catches a single big contract win)

The deregistration threshold is £88,000 — once your rolling 12-month turnover drops below it, you can apply to deregister. Register for VAT on gov.uk.

What is the Flat Rate Scheme?

Under the Flat Rate Scheme you charge VAT to customers at the standard 20% rate, but pay HMRC a fixed percentage of your VAT-inclusive turnover instead of the difference between VAT collected and VAT paid. The percentage depends on your trade, ranging from 4% (food retailers) up to 14.5% (consultants, lawyers, accountants).

You also can't reclaim VAT on most purchases under FRS — except for capital assets costing £2,000 or more (VAT-inclusive) bought as one purchase.

The Limited Cost Trader trap

Since April 2017, businesses whose goods spend (excluding services) is either:

  • Less than 2% of VAT-inclusive turnover, OR
  • More than 2% but less than £1,000 per year

… are classified as Limited Cost Traders and pay 16.5% — almost always more than they would under standard VAT. The calculator above flags this automatically.

"Goods" here means physical things — stock, materials, stationery, fuel for goods vehicles. It does NOT include services (rent, accountancy, software subscriptions), motor vehicles or fuel for cars, food/drink for the business, or capital goods. This is why most pure-service consultants end up classified as LCT.

First-year discount

In your first 12 months of VAT registration, HMRC reduces your FRS percentage by 1%. So if your sector rate is 14.5%, you'd pay 13.5% during that initial year. The calculator above accounts for this when you select "First year".