UK VAT Flat Rate Scheme Calculator
Compare VAT due under the UK Flat Rate Scheme with standard VAT accounting — including the 16.5% limited-cost trader rate.
For information and education only — not financial advice. Results are estimates based on the numbers you enter; check important decisions with a qualified professional.
How to use
- 1Enter your VAT-inclusive turnover for the period and the VAT you paid on purchases.
- 2Enter your sector's flat rate (or tick limited-cost trader) to compare.
How it's calculated
Flat rate VAT = gross turnover (incl. VAT) × flat rate %. Standard VAT = output VAT (gross × 20/120) − input VAT on purchases. First-year businesses get 1 percentage point off the flat rate.
Frequently asked questions
What is a limited cost trader?
A business whose spending on goods is under 2% of turnover (or under £1,000 a year). It must use the 16.5% flat rate, which often removes any benefit.
Who can join the Flat Rate Scheme?
VAT-registered businesses expecting VAT-taxable turnover of £150,000 or less (excluding VAT) in the next 12 months.
Can I reclaim VAT on purchases?
Generally no under the scheme, except on single capital purchases over £2,000 including VAT.