Current UK VAT rates are as follows
| Rate | Description |
|---|---|
| Standard rate | 20% |
| Reduced rate | 5% |
| Zero rate | 0% |
The standard rate of VAT applies to most goods and services. The reduced rate of VAT applies to certain goods and services, such as children’s car seats and home energy. The zero rate of VAT applies to certain goods and services, such as children’s clothes and most food items.
Here are some examples of goods and services that are subject to each VAT rate:
- Standard rate:
- Most goods and services, such as clothes, food, and entertainment
- Professional services, such as legal and accounting fees
- Construction and repair services
- Reduced rate:
- Food and drink
- Books
- Newspapers
- Periodicals
- Medicines
- Fuel for domestic use
- Energy-saving materials
- Mobility aids
- Equipment for blind and partially sighted people
- Welfare services provided by charities at significantly below cost
- Zero rate:
- Exports
- Construction of new dwellings
- Imported goods that are used for exports
- Agricultural products
- Fish and fish products
- Seeds and plants
- Books and newspapers
- Medicines
- Protective clothing
- Transport for disabled people
- Admission to certain sporting events
- Admissions to certain cultural events
If you are a business, you must charge VAT on the goods and services you sell. You can reclaim the VAT you pay on business expenses, such as the cost of materials and equipment.
If you are a consumer, you will pay VAT on the goods and services you buy. You can’t reclaim the VAT you pay.
For more information on UK VAT rates, please visit the GOV.UK website.
History of Vat Rates in the UK
Here is a table of the history of VAT rates in the UK:
| Date | Standard rate | Reduced rate | Zero rate |
|---|---|---|---|
| 1973-01-01 | 10% | – | – |
| 1979-03-01 | 15% | – | – |
| 1981-03-01 | 17.5% | – | – |
| 1994-03-01 | 17.5% | 5% | – |
| 1999-03-01 | 17.5% | 5% | Books, newspapers, children’s car seats, and certain energy-saving materials |
| 2007-04-01 | 15% | 5% | Books, newspapers, children’s car seats, and certain energy-saving materials |
| 2011-01-01 | 20% | 5% | Books, newspapers, children’s car seats, certain energy-saving materials, domestic fuel, and sanitary products |
| 2022-04-01 | 20% | 5% | Books, newspapers, children’s car seats, certain energy saving materials, domestic fuel, and sanitary products |
The standard rate of VAT has been increased several times over the years, most recently in 2011. The reduced rate of VAT has been introduced and removed several times and currently applies to a limited number of goods and services. The zero rates of VAT apply to a wider range of goods and services, including most food, children’s clothing, and books.