Self-Employed - VAT

General information on VAT

The Value Added Tax (VAT) is a tax form we pay when buying certain products or services within the European Union, including of course the United Kingdom.

It is important to know that certain products and services are exempt from VAT or completely eliminated from the UK VAT provisions. In case of these, VAT should not be added, and they are not required to be included in the VAT declaration.

When should you register for VAT?

  • If your company\’s revenue reached or exceeded the current £85,000 limit in the last 12 months.
  • If you think that the revenue will soon exceed the limit mentioned above.
  • If you think that registration is beneficial for you from a financial or economic point of view, you may register regardless of reaching the limit.
  • If you want to purchase products and/or services inside or outside the EU, in some cases it is worth to register for VAT.

VAT declaration normally should be submitted within 3 months after the registration, regardless of the company\’s income or costs.

Current VAT values:

Standard 20 %
Csökkentett 5 %
Nulla 0 %

VAT calculation

Important!

The following calculations can only be applied in case of the current 20% VAT.

Our company assumes no responsibility for damages or errors resulting from using these calculations. 

Example: 

Net value VAT value
£120 £24

 

VAT Gross value
20% £144

 

Calculating gross value:
Net value * 1.20 = gross value
Example: 120 * 1.20 = 144

VAT value calculation: 
Gross value * 1 / 6 = VAT value 
Example: 144 * 1 / 6 = 24

Net value calculation:
Calculation 1 – from VAT value:
VAT value * 100 / 20 = net value
Example: 24 * 100 / 20 = 120

Calculation 2 – from gross value:
Gross value / 1.20 = net value
Example: 144 / 1.20 = 120