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  uk vat rate

In the UK there are three rates depending on the type of goods or services your business provides.

This guide lists certain goods and services that are reduced-rated, zero-rated, exempt or outside the scope of VAT.

Standard rate
You pay VAT on most goods and services in the UK at the standard rate. The standard rate is changed from 15% to 17.5% from 1 January 2010.

Reduced rate
In some cases, for example children's car seats, fuel, gas and electricity for domestic use and charities, renovation and alteration of dwellings, women's sanitary products etc. Areduced rate of five per cent is applicable.

Zero rate
A zero-rated VAT supply is one which is subject to VAT but on which the current VAT rate is 0%.. If all or most of your supplies are zero-rated, you may not need to be registered for VAT. This is called exemption from registration.

There are also some goods and services that are:

♦  exempt - so you don’t pay any vat on them
♦  outside the scope of the UK VAT system altogether

Examples of these types of items:

♦  most food items (but not meals in restaurants or cafes and hot take-away food and drink)
♦  books, newspapers and magazines
♦  booklets, brochures, pamphlets and leaflets
♦  children's clothing & footwear
♦  most prescriptions dispensed to a patient by a registered pharmacist
♦  special exempt items - for example, equipment for disabled people
♦  most public transport services

Exempt supplies
Exempt supplies are business supplies other than taxable supplies on which VAT is not charged.

The following are the supplies exempted from VAT:

♦  selling, leasing and letting land and buildings (but not lettings of garages, parking spaces or hotel and holiday accommodation).
♦  insurance
♦  betting, gambling and lotteries (but not takings from fruit machines)
♦  providing credit
♦  certain education and training
♦  fund raising events by charities
♦  subscriptions to certain membership organizations
♦  the services of doctors and dentists
♦  certain services from undertakers