UK VAT Calculator
Add VAT to a quote, strip it back out of a payment you have received, and see what the Flat Rate Scheme would mean for a cleaning business. All at the current 20% standard rate.
UK VAT Calculator
Add or remove 20% VAT, and see the threshold maths.
VAT at 20% is £50.00
- Net (excluding VAT)
- £250.00
- VAT at 20%
- £50.00
- Gross (including VAT)
- £300.00
Shortcut at 20%: to find the VAT inside a gross figure, divide by 6. £300.00 ÷ 6 = £50.00. Never subtract 20% from a gross amount.
The VAT maths, in one line each
- Adding VAT: multiply the net price by 1.2. £250 net becomes £300 gross.
- Removing VAT: divide the gross figure by 1.2. £300 gross is £250 net and £50 VAT.
- Finding the VAT in a gross figure: divide by 6. £300 ÷ 6 = £50. This shortcut only works at 20%.
- Never take 20% off a gross figure to find the net. £300 minus 20% is £240, which is wrong by £10.
When a cleaning business has to register for VAT
Registration becomes compulsory once your VAT-taxable turnover crosses the UK registration threshold in any rolling 12-month period, not your accounting year, any 12 consecutive months. You must also register if you expect to cross it within the next 30 days alone.
Cleaning services are standard rated at 20%. There is no special reduced rate for domestic cleaning, and no exemption for sole traders.
Check the current threshold on GOV.UK before you act on any figure. It is reviewed at Budgets and changes without much warning. Monitor your rolling 12-month total monthly, not annually. Businesses that only look at year-end accounts routinely discover they crossed the threshold months earlier and owe VAT on invoices they never charged it on.
Why VAT registration hurts domestic cleaners more than commercial ones
A VAT-registered client: an office, a landlord company, a facilities manager: reclaims the VAT you charge. Your price effectively does not change for them, so crossing the threshold is close to neutral on a commercial round.
A household cannot reclaim anything. If you add 20% to a domestic client's bill, they feel every penny. If you absorb it instead, your £20 an hour becomes £16.67 an hour overnight, a 16.7% pay cut across your entire domestic book.
This is why so many domestic-heavy cleaning businesses stall just under the threshold. The realistic options are to plan a deliberate jump: grow fast enough that volume covers the hit, or to restructure toward commercial and landlord work where VAT is neutral.
The Flat Rate Scheme for cleaning businesses
Under the Flat Rate Scheme you still charge clients 20%, but you pay HMRC a lower flat percentage of your gross turnover and generally cannot reclaim VAT on purchases. HMRC publishes a specific rate for general building or construction cleaning and another for other business services: the applicable percentage depends on how your business is categorised, so confirm yours with HMRC or your accountant.
The scheme tends to favour labour-heavy cleaning businesses with low input VAT, because you have little to reclaim anyway. It works badly if you are buying vehicles, machinery or large volumes of consumables.
Watch the "limited cost business" test. If your spend on relevant goods is very low as a share of turnover, which is common for a cleaning firm whose main cost is wages. You may be pushed onto a higher flat rate that wipes out the benefit. This calculator gives you a comparison to take to your accountant; it is not tax advice.