UK VAT Rates on Different Goods and Services
Value Added Tax (VAT) is a tax that gets tacked onto the price of goods and services in the UK. The rate can vary depending on what you’re buying. Businesses act as collectors for HM Revenue & Customs (HMRC), gathering VAT and then paying it when they file their VAT returns. Getting a grip on how VAT operates is crucial for both consumers and businesses. It influences the final price shoppers see in stores and the tax figures that businesses have to manage when selling their products or services. In the UK, there are four primary VAT rates: Standard Rate: 20% Reduced Rate: 5% Zero Rate: 0% Exempt: No VAT charged For the 2025/26 tax year, the VAT registration threshold is set at £90,000. This means that businesses with a taxable turnover exceeding this amount need to register for VAT. What Are the Current UK VAT Rates? There are several UK VAT rates that depend on the type of item or service: Standard Rate (20%) This is the most frequently applied VAT rate and cove...