Do I add VAT to existing prices or include it within existing price?

Hi all,

Just a quick question regarding VAT.

I’ve newly gone VAT registered and am starting to create invoices showing the VAT.
I know i am to select which rate of VAT is charged per product line which adds the VAT to the product value however which of the following do I do?

Existing Product = £100 (before going VAT registered)

  1. Charge £100.00 + VAT = £120
  2. Charge £83.33 + VAT = £100

Is it down to me which I do?



your call, if you want to reduce net price for lower profit then option 2

I suppose my customer can claim the VAT back themselves…

However for products i’m already supplying at agreed rates would you opt for option 1 or 2?

My customers are all VAT registered.


If they are VAT registered, I don’t suppose you adding VAT on or not would make a difference (seems technically the value would be the same before and after), so I’d go for option 1.

If the clients weren’t VAT registered, I’d opt for option 2.

I’d second that. I had the same deliberation when I went VAT registered, most of my clients were VAT registered so option 1 effectively made no difference to them at all.