How Much VAT to Set Aside: Next VAT Bill Calculator

See every VAT bill for the next year, and the month you would run short

This calculator does one quarter. The VAT cash flow forecast does the next 12 months: your bank balance with VAT handled properly, every payment in the month it is due, and a warning before any month where you could not cover it.

A running VAT pot: how much of your bank balance is really HMRC's

Each quarter's payment in the right month, worked out from your quarter end

Money that is really yours, month by month, in red when it goes short

Your rolling 12 months against the £90,000 registration threshold

An Excel spreadsheet that also opens in Google Sheets. Sample figures included, every formula visible. Not tax advice.

How the bill is worked out

You charge VAT on your sales and pay VAT on your costs. At the end of the quarter you pay HMRC the difference. The VAT you charged was never your money, so the safest habit is to move it out of your main account as it comes in.

For example, a quarter with £25,000 of sales at 20% and £9,000 of costs with 20% VAT:

VAT on sales£25,000 × 20% = £5,000.00

VAT on costs£9,000 × 20% = £1,800.00

VAT to pay£5,000.00 − £1,800.00 = £3,200.00

If your costs carry more VAT than your sales, the figure is negative and HMRC repays you instead.

When the bill is due

The return and the payment are both due 1 calendar month and 7 days after the quarter ends. A quarter ending 31 December is due on 7 February. If you pay by Direct Debit, HMRC collects it 3 working days after that. The VAT deadline calculator shows your next four quarters.

How much to put aside each week

Divide the bill by the weeks left until it is due. With 16 weeks to go:

Each week£3,200.00 ÷ 16 = £200.00

Many small businesses open a separate savings account just for VAT and move the money every week or every time a customer pays. It stops the bill landing on a month when cash is tight.

What if you cannot pay on time

Interest runs from the day after the deadline, and a late payment penalty starts after day 15. If you can see a problem coming, ask HMRC for a Time to Pay arrangement before the deadline. The penalty calculator shows what a late payment would cost.

Questions

Do I enter amounts with or without VAT?

Without. Enter sales and costs before VAT and the calculator adds the VAT. If you only have totals including VAT, the reverse VAT calculator splits them.

Which costs can I include?

Only costs where you can reclaim the VAT: business costs with a valid VAT invoice. Wages, most insurance and anything bought from a business that is not VAT registered carry no VAT to reclaim.

Does this work for the Flat Rate Scheme?

No. On the Flat Rate Scheme you pay a fixed percentage of your VAT-inclusive turnover instead. Use the Flat Rate Scheme calculator.

How much VAT to set aside

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