Calculate VAT due under the Flat Rate Scheme (sector percentage on VAT-inclusive turnover, first-year discount, limited cost trader test) and compare it with the standard scheme.
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Applies your sector's flat rate to VAT-inclusive turnover (grossed up at 20%), checks the limited cost trader test (16.5% rate), applies the 1-point first-year discount, and compares the result with the standard scheme (output VAT minus recoverable input VAT).
IT consultancy, £100,000 net turnover (£120,000 gross), 14.5% sector rate, £3,000 goods, £1,000 input VAT: FRS VAT £17,400 vs standard £19,000 — the scheme saves £1,600.
Enter annual turnover excluding VAT.
Enter your sector's flat rate percentage (VAT Notice 733).
Enter annual spend on relevant goods and estimated recoverable input VAT.
Select first year of VAT registration if applicable.
Compare Flat Rate Scheme VAT with the standard scheme and read the verdict.
Last data update
July 5, 2026
Sources and references
HMRC VAT Notice 733 — Flat Rate Scheme for small businesses (gov.uk/guidance/flat-rate-scheme-for-small-businesses-vat-notice-733); gov.uk/vat-flat-rate-scheme.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
VAT-registered businesses expecting VAT-taxable turnover of £150,000 or less (excluding VAT) in the next 12 months. You must leave once total income in the last 12 months exceeds £230,000 including VAT.
16.5% of VAT-inclusive turnover. It applies when spend on relevant goods is under 2% of gross turnover or under £1,000 a year — most labour-only service businesses fall in this category.
Generally no — the flat rate already accounts for input VAT. The main exception is capital assets costing £2,000 or more including VAT in a single purchase.