UK pricing and margin calculator
Work out selling price, gross margin, markup, and VAT-inclusive price from cost. For UK small businesses, freelancers, and product sellers.
How do gross margin and markup differ?
Markup is the percentage you add on top of your cost: a £40 cost with 50% markup sells for £60. Gross margin is the percentage of the selling price that becomes profit: that same £60 sale on £40 cost is a 33.3% margin (£20 ÷ £60). The two numbers are routinely confused — a 50% markup is a 33.3% margin. For UK businesses also pricing for VAT, the standard rate (20%) turns a £60 net price into £72 inclusive. The calculator below converts between cost, price, margin, markup, and VAT-inclusive price in any direction.
Setup
Pricing Inputs
Share of fixed costs per unit
Recommended Selling Price
£1,000.00
Based on a cost of £600.00 and a target margin of 40%.
Total Cost
£600.00
Selling Price ex VAT
£1,000.00
Gross Profit
£400.00
Gross Margin
40.0%
Markup
66.7%
VAT Amount
£200.00
Price inc VAT
£1,200.00
Gross Profit per Unit
£400.00
40.0% margin
Scenario Comparison
| Scenario | Price | Margin | Profit |
|---|---|---|---|
| Conservative | £900.00 | 33.3% | £300.00 |
| Target | £1,000.00 | 40.0% | £400.00 |
| Stretch | £1,100.00 | 45.5% | £500.00 |
Conservative is 10% lower price. Stretch is 10% higher price.
Price Breakdown
Insight
A margin of 40.0% is within a typical range. Consider whether overhead allocation and delivery costs are fully captured.
VAT of £200.00 adds to the customer-facing price. If customers are not VAT-registered, this increases their effective cost.
Better bookkeeping and cost tracking can improve pricing decisions. Speak with RR Accountants for support.
Disclaimer: This calculator provides general estimates for planning purposes only. Results depend on the assumptions entered and do not constitute financial or tax advice. Actual margins and profitability depend on accurate cost data, market conditions, and business circumstances.
Need help pricing more profitably?
Pricing is not just a sales decision. It affects margin, cash flow, VAT, and long-term growth. RR Accountants helps businesses understand costs, improve reporting, and make more profitable financial decisions.
Get Expert Help
What this calculator helps you understand
Profit Margin
See how much of your selling price remains after direct costs.
Markup vs Margin
Understand the difference so you do not underprice by mistake.
VAT Pricing
See how VAT changes customer-facing price and reported revenue.
Break-Even Planning
Estimate how many sales you need before the business starts generating profit.
This calculator is designed to provide a practical estimate for planning purposes. For tailored advice on pricing, management accounts, VAT, and profitability, speak with RR Accountants.
Frequently Asked Questions
Need help with pricing, margins, or profitability?
RR Accountants supports UK businesses with bookkeeping, management accounts, VAT, payroll, tax planning, and the financial reporting needed to make better commercial decisions.