Free Tools by Billion Studio  ·  Built for UK Small Businesses
Free UK VAT Tool · Updated 2026

VAT Scheme Comparison
Flat Rate vs Standard

Not sure if the Flat Rate Scheme is actually saving you money? Enter your turnover and expenses to see exactly which VAT scheme works best for your business — and how much you could save by switching.

📊

Compare Your VAT Options

For UK VAT-registered businesses · HMRC 2026 rates

Your Business
Your sector determines your Flat Rate percentage
First year of VAT registration?
Get 1% discount on your flat rate
Annual Figures (exc. VAT)
£
Your total sales excluding VAT
Annual VAT-able Expenses
💻 Equipment & Goods
£
£
£
£
🏢 Premises & Services
£
£
£
£
🚗 Travel & Other
£
£
£
£
ℹ️
Note: Only include expenses where you pay VAT and would normally reclaim it. Don't include wages, bank charges, insurance premiums (most are VAT-exempt), or items you buy from non-VAT registered suppliers.
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Your VAT Comparison

RECOMMENDED
Flat Rate Scheme
VAT charged to customers —
Flat rate applied —
VAT payable to HMRC —
Net VAT cost —
RECOMMENDED
Standard VAT
VAT charged to customers —
VAT reclaimable on expenses —
VAT payable to HMRC —
Net VAT cost —
Annual savings with Flat Rate
£0
per year by using the recommended scheme

📋 Quick Eligibility Check

£150k
Max turnover to join FRS
  • VAT turnover must be £150,000 or less (excl. VAT) to join
  • Must leave if turnover exceeds £230,000 (incl. VAT)
  • Can't use with Cash Accounting or Retail Schemes
  • First-year businesses get 1% discount

⚠️ Limited Cost Trader Rule

⚖️ From April 2017 · Affects most service businesses

If your spending on relevant goods is less than 2% of turnover (or under £1,000/year), you're a "limited cost trader" and must use 16.5% — regardless of sector.

  • Services (accountancy, rent, software) don't count as goods
  • Vehicle costs excluded unless transport is your trade
  • Capital assets over £2,000 can still be reclaimed

💡 Common Flat Rates

Sector Rate
IT consultancy 14.5%
Accountancy 14.5%
Management consultancy 14%
Business services (other) 12%
Building (with materials) 9.5%
Limited cost trader 16.5%
Coming Soon

Invoicing that handles the VAT headache for you

Billdocket automatically calculates VAT on every invoice, tracks what you've charged, and keeps your records MTD-ready — so quarterly returns take minutes, not hours.

⚠️ Disclaimer: This calculator is provided as a free guide for UK businesses. Results are based on current HMRC flat rate percentages and the standard 20% VAT rate. Always verify your specific sector rate at GOV.UK and consult a qualified accountant before making decisions about your VAT scheme. This tool does not constitute financial or tax advice.