VAT Flat Rate Scheme Calculator

Calculate how much VAT you would pay under the HMRC Flat Rate Scheme (FRS) and whether it saves money compared to standard VAT accounting. All HMRC-published FRS rates included.

VAT Flat Rate Scheme Calculator

Is the FRS right for your business?

VAT-inclusive annual turnover (£)

Business sector (HMRC flat rate)

First year of VAT registration?

What is the VAT Flat Rate Scheme?

The VAT Flat Rate Scheme simplifies VAT accounting for small businesses. Instead of calculating VAT on every sale and purchase, you pay a fixed percentage of your VAT-inclusive turnover directly to HMRC.

How to join the FRS

Your VAT-taxable turnover must be £150,000 or less (exc. VAT) to join
You must leave if your total business income exceeds £230,000
You cannot reclaim VAT on purchases (except certain capital assets over £2,000)

First-year discount

In your first year of VAT registration, HMRC allows a 1% reduction on your flat rate. This discount applies for 12 months from the date you registered for VAT.

Limited cost business rules

If your VAT-inclusive spending on goods is less than 2% of your VAT-inclusive turnover (or less than £1,000/yr), you are a "limited cost business" and must use a flat rate of 16.5%. This typically applies to service-based businesses with few material costs.

VAT rules change regularly — always verify current rates on GOV.UK and consult your accountant.