VAT Flat Rate Scheme Calculator
Work out if the VAT Flat Rate Scheme could save your business money. This tool compares your liability under the scheme against standard VAT accounting.
Enter Your Details
Your FRS Results
Standard VAT Payable
£8,333.33
FRS VAT Payable (12%)
£6,000.00
Potential Annual Saving
£2,333.33
Effective VAT Rate
12.00%
Understanding the Flat Rate Scheme
The VAT Flat Rate Scheme (FRS) simplifies how small businesses handle their VAT. Instead of meticulously tracking and reclaiming VAT on every purchase, you apply a single, fixed-rate percentage to your gross turnover. This percentage is determined by your industry.
This calculator helps you compare the amount of VAT you would pay under the FRS with standard VAT accounting. For many businesses, especially those with low costs, the FRS can lead to a financial gain and reduced administration. However, if you are a 'limited cost business', the scheme is much less advantageous.
Flat Rate Percentages by Business Type
The rate you use depends on your business sector. Remember, if your business spends very little on goods, you may have to use the 'limited cost business' rate of 16.5%.
| Business Type | Rate |
|---|---|
| Accommodation Or Catering | 10.5% |
| Advertising | 11% |
| Agricultural Services | 11% |
| Architect Surveyor Or Building Services | 14.5% |
| Business Services Not Listed | 12% |
| Computer It Consultancy Or Data Processing | 14.5% |
| Entertainment Or Recreation | 12.5% |
| Estate Agent Or Property Management | 12% |
| Film Tv Or Video Production | 13% |
| Financial Services | 13.5% |
| Forestry Or Fishing | 10.5% |
| General Building Or Construction Services | 9.5% |
| Hairdressing Or Other Beauty Treatment Services | 13% |
| Hotel Or Accommodation | 10.5% |
| Investigation Or Security | 12% |
| Journalism Or Photography | 12.5% |
| Laundry Or Dry Cleaning Services | 12% |
| Lawyer Or Legal Services | 14.5% |
| Library Archives Museums Or Other Cultural Activities | 9.5% |
| Management Consultancy | 14% |
| Manufacturing Food And Drink | 9% |
| Manufacturing Not Food And Drink | 9.5% |
| Membership Organisation | 8% |
| Mining Or Quarrying | 10% |
| Packaging | 9% |
| Printing | 8.5% |
| Publishing | 11% |
| Pub | 6.5% |
| Real Estate Activity Not Listed | 14% |
| Repairing Vehicles Or Agricultural Machinery | 8.5% |
| Repairing Other Goods | 10% |
| Retailing Food And Drink | 4% |
| Retailing Pharmaceuticals Medical Goods Cosmetics Or Toiletries | 8% |
| Retailing Not Listed | 7.5% |
| Secretarial Services | 13% |
| Social Work | 11% |
| Sport Or Recreation | 8.5% |
| Transport Or Storage Including Courier Services | 10% |
| Travel Agency | 10.5% |
| Veterinary Medicine | 11% |
| Wholesaling Food And Drink | 7.5% |
| Wholesaling Agricultural Products | 8% |
| Wholesaling Not Listed | 8.5% |
| Limited Cost Business | 16.5% |
Source: GOV.UK. Rates are for the 2025/26 tax year and are subject to change.
When is the Scheme Right for You?
Advantages
- Simplified VAT returns and less paperwork.
- Potential to pay less VAT than under the standard scheme.
- Certainty about your VAT liability.
Disadvantages
- You cannot reclaim VAT on most purchases.
- The 16.5% rate for 'limited cost businesses' can make it unattractive.
- May not be suitable if you make a lot of zero-rated or exempt sales.
It is important to assess your business circumstances carefully. If your business is growing, you may also need to plan for other taxes. Consider using our Corporation Tax Calculator or PAYE Calculator to understand your full tax position.
Frequently Asked Questions
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