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  3. UK VAT, Profit & Pricing Calculator

UK VAT, Profit & Pricing Calculator

Add or remove UK VAT, work out profit, margin and markup, set selling prices from a target margin, and check discounts and break-even.

Loading UK VAT, Profit & Pricing Calculator…
Using this tool is free. Each download or copy of a result uses 1 export; the same result again within 24 hours is free.
  • Runs in your browser
  • No sign-up needed to try

What is the UK VAT, Profit & Pricing Calculator?

The Soft Premium Tools UK VAT, Profit & Pricing Calculator helps UK businesses calculate VAT-inclusive and VAT-exclusive prices, work out product profit, margin and markup, set selling prices from a target margin, check the effect of discounts, and find their break-even point. It’s made for sole traders, limited companies, freelancers, online and marketplace sellers, retailers, tradespeople and their bookkeepers.

Eight calculators in one

  • Add or remove VAT

    Turn a net price into a VAT-inclusive one, or take VAT out of a gross price, at 20%, 5%, 0% or a custom rate.

  • VAT on an invoice

    Several lines, each with its own rate and discount, an order discount, and a choice of HMRC rounding methods.

  • Profit, margin and markup

    Profit per unit and in total, with extra costs such as postage and packaging, marketplace and card fees, and fixed costs.

  • Selling price

    The price you need for a target margin, a profit per unit, a markup, or just to break even, with fees built in.

  • Discounts

    Profit and margin before and after a discount, the largest discount that keeps a minimum margin, and the extra sales needed.

  • Break-even

    How many sales cover your fixed costs, the revenue needed, and your profit or loss at the sales you expect.

  • Product list

    Price many products at once, import them from CSV or Excel, and spot loss-makers and low margins.

  • What if?

    Compare today with up to three changes, such as supplier price rises, a sale, or higher fees.

UK VAT rates

TreatmentVAT chargedExamples and notes
Standard rate 20%20%Most goods and services.
Reduced rate 5%5%Some goods and services, for example children's car seats and home energy.
Zero rate 0%0%Zero-rated goods and services, for example most food and children's clothes. These are taxable supplies at 0%: they count towards your VAT turnover and you can usually reclaim VAT on related costs.
Exempt (no VAT)NoneExempt supplies, for example postage stamps, and many financial and property transactions. No VAT is charged. Unlike zero-rated supplies, they don't count towards VAT taxable turnover, and VAT on related costs often can't be reclaimed.
Outside the scope of UK VATNoneTransactions that aren't supplies for UK VAT at all, for example some services supplied abroad, statutory fees, or money that isn't payment for a supply. No VAT is charged and they aren't part of VAT turnover.

Which rate applies depends on exactly what you sell. Check HMRC’s guide to VAT rates on different goods and services. You must register for VAT if your taxable turnover for the last 12 months is over £90,000, or you expect it to go over £90,000 in the next 30 days (GOV.UK). Rates last checked on 26 October 2026.

How the calculations work

Adding VAT

VAT = net × rate. Gross = net + VAT. £100 at 20%: VAT £20.00, gross £120.00.

Removing VAT

Net = gross ÷ (1 + rate). VAT = gross − net. £120 at 20%: net £100.00, VAT £20.00. At 20%, VAT is 1/6 of the gross price; at 5%, 1/21.

Margin and markup

Margin = profit ÷ selling price. Markup = profit ÷ cost. Selling at £50 something that costs £30: £20 profit, 40% margin, 66.67% markup.

Price for a target margin

Price = cost ÷ (1 − margin − fees). A £40 cost at a 40% margin needs £66.67 excluding VAT (rounded up so the margin is met).

Break-even

Sales needed = fixed costs ÷ (price − variable cost per unit), rounded up to whole units. £1,000 ÷ (£25 − £15) = 100 sales.

Rounding

Sums are worked out exactly, then rounded to the penny only when shown. On invoices you choose: VAT rounded per line, per rate total, or rounded down per total (allowed for invoices, not retailers, under HMRC VAT Notice 700, 17.5–17.6).

If you’re VAT-registered, the VAT you charge isn’t your revenue or profit: you collect it for HMRC, so margins are worked out on prices excluding VAT. If you’re not registered, you don’t add VAT, and the costs you enter should include the VAT you pay, as you can’t reclaim it. The profit shown is gross profit on the costs you enter, not your business’s net profit after overheads, wages and tax.

Free and paid

Every calculator is free to use, and you can see every result on screen with no account. Keeping a result uses one export: downloading the Excel or CSV report, copying the results, or printing (or saving as PDF). The same result again within 24 hours is free. See pricing for export packs and monthly plans. Your figures are worked out in your browser and aren’t sent to us; saved calculations stay on your device.

Before you rely on the figures

The results are only as good as the figures and VAT treatment you enter. The calculator doesn’t decide which VAT rate, exemption or scheme (such as the Flat Rate Scheme or a retail scheme) applies to your business, and it isn’t tax or accounting advice. It isn’t connected to or endorsed by HMRC. For special cases, read HMRC’s guidance or ask an accountant. Sources: VAT rates (GOV.UK), VAT rates on different goods and services (HMRC), Register for VAT (GOV.UK), VAT guide (VAT Notice 700).

Set prices with confidence. Try any calculator above: results appear as you type.

Start calculating

How to use the UK VAT, Profit & Pricing Calculator

  1. Say whether you’re VAT-registered and choose the VAT rate on your sales (20%, 5%, 0%, exempt or outside the scope).
  2. Pick a calculator (VAT, invoice, profit, selling price, discounts, break-even, product list or what-if) and enter your figures; results update as you type.
  3. Check the working shown under each result, then download, copy or print the report.
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Questions about this tool

Is the UK VAT, Profit & Pricing Calculator free?

Using it and previewing the result are free. Downloading, copying or saving the final result uses 1 export: from £1.00 for 5, or included in a monthly plan. The same result again within 24 hours is free.

How do I calculate VAT in the UK?

Multiply the price excluding VAT by the VAT rate. At the standard 20% rate, £100 + VAT is £100 × 0.2 = £20 VAT, so £120 in total. The reduced rate is 5% and some goods and services are zero-rated (0%). GOV.UK lists which rate applies to what.

How do I remove VAT from a VAT-inclusive price?

Divide the price by 1 plus the VAT rate. At 20%, £120 ÷ 1.2 = £100 before VAT, so the VAT is £20. A quick check: at 20% the VAT is one sixth of the VAT-inclusive price, and at 5% it is one twenty-first. Don’t take 20% off the gross price: that gives the wrong answer (£96).

What is the difference between profit margin and markup?

Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. Selling for £50 something that costs £30 gives £20 profit: a 40% margin (20 ÷ 50) but a 66.7% markup (20 ÷ 30). Mixing them up is a common reason for under-pricing.

How do I work out the selling price for a target profit margin?

Divide your cost by (1 − the margin). For a 40% margin on a £40 cost: £40 ÷ 0.6 = £66.67 before VAT. If marketplace or card fees are a percentage of the price, take them off too: £40 ÷ (1 − 0.4 − 0.1) = £80 with a 10% fee. The Selling price calculator does this for you, including fees charged on the VAT-inclusive price.

Does the VAT I collect count as profit?

No. If you’re VAT-registered, the VAT you charge customers is collected for HMRC and paid over in your VAT return, so it isn’t revenue or profit. That’s why the calculator works out margins on prices excluding VAT. VAT you pay on business costs can usually be reclaimed, so enter costs excluding that VAT.

Can I use it if my business isn’t VAT-registered?

Yes. Choose “No, I don’t charge VAT” at the top. No VAT is added to your prices, and you should enter your costs including the VAT you pay, because you can’t reclaim it. You must register if your taxable turnover goes over the registration threshold (£90,000 in any 12 months when we last checked GOV.UK).

How do discounts affect my profit?

A discount comes straight off your profit, so it cuts the margin faster than you might expect. A 20% discount on a product with a 40% margin halves the profit per sale, so you’d need to sell twice as many to earn the same. The Discounts calculator shows this, and the largest discount that keeps your minimum margin.

How is VAT rounded on invoices?

You choose: VAT rounded to the nearest penny on each line, or worked out exactly and rounded once per VAT rate, or rounded down per rate total. HMRC allows rounding the invoice VAT total down to the penny for invoice traders, but not for retailers working out VAT on their takings (VAT Notice 700, paragraphs 17.5 to 17.6). Use one method consistently.

Is this tax advice?

No. The calculator does the arithmetic for the figures and VAT treatment you choose. It can’t decide which rate, exemption or VAT scheme applies to your goods or services, and it isn’t connected to HMRC. For special cases, read HMRC’s guidance or ask an accountant.

Is my information uploaded?

No. It works entirely in your browser, so your text and files stay on your device.

Does it work on my phone?

Yes. It works in any modern browser on phones, tablets and computers, with nothing to install.

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