VAT calculator

VAT calculator

What is VAT?


Sometimes people ask questions like: “what is VAT and why do we need it?” Such things are useful and important to know as every inhabitant of the UK is connected with VAT. Either you are an average customer or a businessman; you have to know as much as it’s possible about VAT.
So what is VAT? VAT is a kind of tax, added to every price of almost every item you buy. If you see a price and there is a note: “including vat”, then you definitely know that the portion of this price is VAT.
When you don’t know what is VAT and how big its portion in the price is you use VAT calculator. There are two ways to calculate VAT with the help of VAT calculator. The first way is to exclude VAT from the gross amount. This way you’ll be able to calculate VAT and net amount. The second way is opposite: you enter your net amount and calculate VAT and gross amount with the help of VAT calculator.
All the goods and services of the country are divided into two groups. The first group includes VAT-rated items and the second group includes VAT-exempt services. Here are some services, which belong to the second group: rent, private education, health services, postal services, finance and insurance, and gambling.
Business organizations of the UK register for VAT not as soon as they start their business activity, but as soon as the sum of their sales outstrips £67000. But of course a business can register for VAT any time before achieving this level.
However there are some goods, which don’t include VAT at all. For example baby clothes and footwear and a lot of printing editions don’t include VAT in their price. So you pay the initial price for those goods.
But there also exists a reduced VAT rate. For example the price of the mobility devices for elderly people includes only 5% VAT cost. For the gas and electricity in domestic and residential buildings you pay 5% vat too.

If you want to know the formula, which operates UK VAT calculator, visit these pages, where is explained how to add VAT to a price and how to take VAT off a price.

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