How to use the VAT invoice calculator
- Choose how you're entering prices. Most invoices are priced before VAT. Pick Including VAT if your prices already have VAT in them, for example retail prices.
- Add a line for each item or service. Enter a quantity (leave it blank for 1), the unit price and the VAT rate.
- Mix rates if you need to. One invoice can include 20%, 5%, zero-rated and exempt lines. The summary shows the VAT at each rate separately.
- Copy the summary into your invoice, quote or spreadsheet.
Worked example
A supplier invoices a children's nursery for new furniture, fitting, car seats and books. Four lines, three different VAT rates:
| Line | Qty × price | Rate | Net | VAT |
|---|---|---|---|---|
| Storage units | 4 × £32.50 | 20% | £130.00 | £26.00 |
| Fitting (hours) | 3 × £45.00 | 20% | £135.00 | £27.00 |
| Children's car seat | 1 × £120.00 | 5% | £120.00 | £6.00 |
| Children's books | 2 × £12.99 | 0% | £25.98 | £0.00 |
| Totals | £410.98 | £59.00 | ||
Invoice total: £410.98 + £59.00 = £469.98. The VAT breakdown shows 20% VAT of £53.00 on £265.00, 5% VAT of £6.00 on £120.00, and £25.98 of zero-rated sales.
What the totals on a VAT invoice must show
A full VAT invoice has to show, among other things, the total amount excluding VAT, the total VAT charged, and the rate of VAT for each item. If you charge more than one rate, show the VAT for each rate. The calculator gives you all of these figures. The full list, including your VAT number, invoice number and dates, is in our guide to what a VAT invoice must include.
Zero-rated and exempt are different
Both have no VAT on the invoice, but they are treated differently. Zero-rated goods, such as most books and children's clothes, are still VAT-taxable at 0%. Exempt supplies, such as most insurance and some education, are outside the VAT system. Use the Exempt option for these so they appear separately in the breakdown.
Rounding VAT on an invoice
HMRC allows VAT to be rounded on each line or on the invoice total, as long as you do it consistently. This calculator rounds each line to the nearest penny and adds them up, which is how most invoicing software works. Rounding on the total instead can make the VAT differ by a penny or two.
Frequently asked questions
Do I have to be VAT registered to charge VAT?
Yes. You can only charge VAT and issue VAT invoices if you are VAT registered. If you are not registered, your invoices should not show VAT. See how to register for VAT.
Can one invoice have different VAT rates?
Yes. Set the rate on each line and the calculator shows the VAT at each rate separately, which a VAT invoice needs.
How do I add a discount?
Lower the unit price on the line the discount applies to. VAT is charged on the price after the discount, so the calculator will work out the right VAT.
Does this save my invoice?
No. Nothing you type is stored or sent anywhere. Use Copy invoice summary to keep the figures.