This is a rather complex question and many variables comes into play, such as if your are on a Flat Rate Scheme, or if Domestic Reverse Charge applies. However, under normal circumstances, when a business is on the standard VAT scheme without any reverse charges applicable, the formula is;
(OUTPUT VAT) – (INPUT VAT) = VAT LIABILITY
The output VAT is the VAT that you have charged on your own sales of goods and services. Input VAT is the VAT that you have paid on eligible goods and services to provide your sales.
However, this simple formula is often clouded by many grey areas that may arise. At Taxfile we can cover all aspects of VAT from registration, bookkeeping, as well as the actual calculation.