Markup Calculator for UK Businesses

A UK markup calculator converts cost to selling price including 20% VAT. Markup is profit as a percentage of cost; margin is profit as a percentage of price. A 50% markup gives a 33% margin; a keystone 100% markup gives 50% margin. HMRC VAT Notice 700 is the authoritative reference.

Markup and margin are mathematically related but commercially different, and UK retailers and tradespeople routinely confuse them. The conversation usually goes: "What markup do you put on?" "About 40%." But 40% markup on a £100 cost is a £140 sale — a 28.6% margin. If you thought you were making 40 pence in the pound, you've just found why year-end accounts look thinner than expected.

This calculator handles UK pricing in two clear steps.

Step 1 — Cost to ex-VAT price: apply your chosen markup to your VAT-exclusive cost. If you're VAT-registered, your supplier's invoice may include 20% VAT that you'll reclaim — work in ex-VAT figures throughout, because that's how HMRC's CT600 will see it.

Step 2 — Ex-VAT to shelf price: add 20% VAT (or 5% reduced rate for energy-saving products, children's car seats, etc.) to get the price the customer pays. The calculator runs the math both ways — input a target margin and it back-solves to shelf price; input a competitor's shelf price and it tells you the margin at current cost.

UK markup conventions by sector (industry-typical, before haggling): - Builders' merchants: 25-40% on materials, 10-15% on plant - Independent fashion retail: 200-300% (keystone-plus) - Hospitality wine: 250-400% by the glass - Independent bookshops: 30-50% - Plumbing / electrical parts: 30-100% depending on whether customer or trade sourced

For VAT-registered businesses, the calculator also outputs the input VAT recoverable on cost — useful for checking that a particular pricing scheme leaves you net positive after quarterly HMRC filing. For the underlying VAT rules, HMRC's VAT Notice 700 and the VAT rates page on gov.uk are authoritative.