Add or remove VAT from freelance invoice amounts. Works for UK (20%), EU rates, and any custom VAT percentage.
Invoicing, Tax & Tools
Bill clients, track time, and file taxes — software built for the self-employed
VAT (Value Added Tax) is a consumption tax charged at each stage of production. If you're a VAT-registered freelancer, you charge VAT on your invoices, collect it from clients, and remit the net amount (collected VAT minus VAT you've paid on business purchases) to the tax authority quarterly.
Registration thresholds vary by country. In the UK, the standard rate is 20% and you must register when turnover exceeds £90,000/year. In Germany the rate is 19%, France 20%, and Ireland 23% for most services.
The mechanics are simple: if your net fee is £1,000 and you add 20% VAT, you invoice the client for £1,200. You keep £1,000 and send £200 to HMRC (minus any input VAT you've paid on supplies). The VAT is not income — it flows through your business.
For international B2B clients within the EU, the reverse charge mechanism usually applies: you invoice without VAT, and the client accounts for it in their own country. For US-based clients, there's typically no VAT obligation for digital services delivered from the UK/EU.
VAT
Value Added Tax — a consumption tax added to the price of goods and services at each stage of production, collected by businesses and remitted to tax authorities.
Invoice
A formal document sent to a client requesting payment for goods or services rendered, detailing the amounts, descriptions, and payment terms.
Net Income
A freelancer's total earnings after deducting all business expenses and taxes — the actual profit the business generates.
In the UK: when your taxable turnover exceeds £90,000 in any 12-month period. In EU countries: thresholds vary by country. In the US: there's no federal VAT, but state sales tax may apply to certain services.
Show the net amount, the VAT rate and amount separately, and the gross total. Also display your VAT registration number. Example: Services £1,000 + VAT at 20% £200 = Total £1,200. VAT Reg: GB123456789.
For B2B clients in other EU countries: usually not — the reverse charge mechanism applies and they self-account for VAT. For B2C international clients: depends on the country and nature of services. Consult an accountant for your specific situation.
Yes — one of the benefits of VAT registration is reclaiming input VAT on qualifying business purchases. This can be significant if you buy expensive software, equipment, or use other VAT-registered suppliers.
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