William Hearn

B2 VAT & margins

VAT, margins, and percentages, sorted.

William built this for the sums that turn up in tidy books every single week: adding VAT, taking it back off again, and the eternal margin-versus-markup muddle (a classic accountant’s pet peeve). Everything updates as you type and rounds to the penny, halves up, exactly like Excel’s ROUND.

2026/27 UK ratesRuns in your browserPenny-perfect rounding

Add or remove VAT

I have a…

Commas and £ signs are fine. Negative amounts work too, for credit notes.

VAT rate
Quick amounts

Gross (including VAT) — Type an amount to get started.
  • Net
  • VAT
Net (excluding VAT)
—
VAT at 20%
—
Gross (including VAT)
—
fxThe same sum in Excel
=ROUND(100*20%, 2)

Good to know

The VAT registration threshold is £90,000. You must register for VAT if your taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over £90,000 in the next 30 days alone. You can ask to deregister if it drops below £88,000. These have been the limits since 1 April 2024 and still apply in 2026/27. See Register for VAT on GOV.UK.

Estimates, not financial advice. These calculators do straightforward sums. They do not cover the Flat Rate Scheme, the VAT margin schemes for second-hand goods, exempt supplies, or which rate applies to what you sell. For that, check VAT rates on GOV.UK or ask a qualified adviser.

Figures used (2026/27)
UK VAT rates and thresholds used by this calculator
ItemFigure
Standard rate (most goods and services)20%
Reduced rate (e.g. home energy, children’s car seats)5%
Zero rate (e.g. most food, children’s clothes)0%
Registration threshold (rolling 12 months)£90,000
Deregistration threshold£88,000

Sources: VAT rates, VAT thresholds, and Register for VAT on GOV.UK, checked 9 October 2026.

How the rounding works

All the money maths is done in whole pence, so £0.10 + £0.20 really is £0.30 (computers are surprisingly bad at that one). Each result is rounded to the nearest penny, with exact halves rounded away from zero, which is what Excel’s ROUND does too.

To remove VAT, the calculator works out the VAT using the VAT fraction (1/6 at 20%, 1/21 at 5%), rounds it to the penny, then takes it off the gross. That way net plus VAT always equals the gross, to the penny.

HMRC has its own detailed rules for rounding VAT on invoices, set out in its VAT guide (Notice 700), so a real invoice can occasionally differ by a penny.

The Excel cheat sheet

The formulas behind every tab, ready to paste. Cost in A2, selling price (or the amount) in B2, and a percentage in C2.

fxvat-and-margins.xlsx
Add 20% VAT       =B2*1.2
VAT inside gross  =B2/6
Remove 20% VAT    =B2/1.2
Margin            =(B2-A2)/B2
Markup            =(B2-A2)/A2
Price for margin  =ROUND(A2/(1-C2), 2)
% change          =B2/A2-1
  • Ctrl+Shift+%Formats the selected cells as a percentage. Mac: Control Shift %
  • F4While editing, turns C2 into $C$2, so a VAT rate cell stays put when you fill down. Mac: ⌘ T (or F4)