Work out the correct rate of VAT


dice with percentage signs - Work out the correct rate of VATVAT-registered businesses charge VAT on sales of most goods and services at the appropriate rate and pay the VAT they have charged to HM Revenue & Customs (HMRC).

VAT is generally charged at the standard rate of 20%. There is a reduced rate of 5% which is charged on items including energy-saving materials, mobility aids and sanitary protection products. A zero rate also applies to some goods and services such as food and drink (although confectionary, hot food, take aways and alcoholic drinks all attract the standard rate of 20% VAT).

VAT is not charged on goods and services that are exempt from VAT or those which are outside the scope of UK VAT. You can also zero rate goods and services which are exported outside the European Union.

The rates applicable may only apply if certain conditions are met, or in particular circumstances such as:

  • who’s providing or buying the goods
  • where they have been provided
  • how they've been sold
  • whether you have the necessary evidence and kept the right records

Other conditions may apply.

This guide from HMRC explains VAT rates on different goods and services.

Note: you can also find a full list of VAT notices on the GOV.UK website.

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