Complete your VAT calculations here quickly and simply. Enter the amount of VAT you want to add or subtract on the calculator. This will then instantly provide you with your own ‘forwards’ or ’backwards’ VAT element. The standard rate of VAT in the UK in 2019 is 20%.
Businesses registered for VAT must pay HMRC a specific percentage of the income they receive from ‘taxable supplies’. This includes the selling of assets, business sales, and commission.
Multiply the net amount by 1 + VAT percentage (i.e. multiply by 1.15 if VAT is 15%) and you’ll get the gross amount.
You’ll need to pay a certain amount of VAT to HMRC, even if you didn’t charge VAT to your customer. This is why it’s crucial you know a) what goods or services to charge VAT on, and b) how much VAT needs to be charged.
Adding VAT is fairly straightforward. But what if your price already has VAT added and you need to work out the original value? This is where calculating VAT ‘backwards’ comes in.
Divide the gross amount by 1 + VAT percentage (i.e. if it is 15%, then you should divide by 1.15)
Unfortunately, working out VAT backwards isn’t quite as simple, so it’s always best to double check against handy online calculators at all times.
It is difficult to clearly determine the true origins of Value Added Tax.
It is officially recognised that the concept of VAT was first presented on April 10, 1954 by French engineer Maurice Laure.
It is worth mentioning, however, that this system was also mentioned by the son of the telecommunication magnate Dr. G. von Siemens in his works from 1920.
A tax of similar construction was also introduced in Norway in 1940 with a rate of 10%.
It is known, however, that since the inception VAT has become a very important tool of taxation and to this day is a significant source of income for many modern economies.
Over the years, VAT has been gaining popularity.
It was introduced successively in many economies around the world, eg Denmark (1967), United Kingdom (1973), Mexico (1980), China (1984), New Zealand (1986), Canada (1991), Australia ( 2000) or India (2005).
The increased interest in this form of taxation probably resulted from its two basic advantages:
1: VAT charges consumption, not production.
2. In contrast to the tax on profits, VAT is relatively insensitive to economic crises.
Right now, VAT faces a significant crossroad. With mass digitalisation, the economy faces both opportunities and obstacles ahead.
In the near future, authorities can utilise Big Data and Artificial Intelligence analytics in the struggle against fraud and tax avoidance.
Using these innovations also brings a more efficiently run process for taxpayers too.
However, digital business structures also provide challenges to the tax authorities, which many countries are already exploring now.
The ever-increasing trend of e-commerce, the huge rise in digital content sales, the ability to create strong anti-fraud measures, and the development of VAT management – have vast repercussions on VAT regulations and means that the future is shrouded in mystery.
At Nordens, we're more than just accountants - we're business experts who can help you achieve your biggest goals.
Our specialist strategic division at Nordens boasts some of the leading entrepreneurial business minds in the country. We cater towards delivering consistent success stories, whilst helping businesses achieve above and beyond their initial goals.
Through highly-tailored guidance, coaching and advice, Nordens Strategic are able to define exactly how your business can reach new levels of success.
Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we’ll steer you along the path to a greater future.
Every business, no matter how big or small, needs to make the right decisions, and how to best manage your accounts can put huge question marks over your business. Accounting2You is here to take that pressure off and provide you with all the answers you need.
Our bookkeeping branch offers a fully inclusive, comprehensive service that you can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of both individuals and small businesses.
With experts in payroll analysis, credit control and financial recording, Accounting2You will lead your business efficiently, and with real purpose, towards a prosperous future.
Voted as EXCELLENT - 9.9 out of 10 based on 164 reviews
We've always got our ears to the ground when it comes to interesting, useful and topical information relating to business and accountancy.
We love making videos that break down convoluted accountancy jargon into plain-talking, actionable and accessible facts.
In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier. The difficult part, for me, was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.
Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). We worry about the bye-laws, regulations and ethical guidelines of the ACCA so you don’t have to! That makes us an ACCA-accredited employer as well as a Professional Passport-accredited one!
At Nordens, we're committed to keeping our clients updated on all things business strategy and news. Each week we update our newsletter subscribers on what really matters in the big bad world of business. That way, you can stay one step ahead!
In celebration of our 18th birthday, we’ve launched our Refer-a-Friend scheme, allowing you to receive a thank you gift from us of up to £1,000 for successfully introducing a new client.
Our team of experts will be in touch to find the very best time to hold a free, no strings attached, one-hour consultation.