Net (ex VAT): £0.00

Gross (inc VAT): £0.00

VAT (at 20%): £0.00

20%

Popular Worldwide VAT Rates

Current VAT Rate

Value Added Tax, known as VAT, is a tax on goods and services in the UK.
It is an indirect tax collected by VAT-registered businesses for the government.

Businesses charge VAT to customers and pass it to HMRC.

Current VAT Rates in the UK

The standard VAT rate is 20%.
It applies to most goods and services sold in the UK.

Other VAT rates also apply in certain cases.
You can add or remove VAT using our VAT calculator.

Reduced VAT Rate

A 5% reduced rate applies to some items, including:

  • Home energy products
  • Children’s car seats
  • Sanitary products

Zero VAT Rate

A 0% VAT rate applies to zero-rated goods and services.

Common examples include:

  • Most food items
  • Children’s clothing
  • Books and newspapers

VAT-Exempt Items

Some items are exempt from VAT.
This means VAT is not charged at all.

Examples include:

  • Postage stamps
  • Financial services
  • Property transactions

History of VAT in the UK

VAT was introduced in 1973 after the UK joined the European Economic Community.
It replaced Purchase Tax, which began in 1940.

The standard VAT rate has changed over time.
These changes reflect economic and political decisions.

Under EU rules, the standard VAT rate could not fall below 15%.

Standard VAT Rate Over Time

YearStandard VAT Rate
1973–197410%
1974–19798%
1979–199115%
1991–200817.5%
2008–200915%
2009–201117.5%
2011–Present20%

How Do You Pay VAT?

Businesses with turnover above £85,000 per year must register for VAT.
They must charge VAT and pay it to HMRC.

Fast Payment Methods

Same or next-day payments can be made using:

  • Online or telephone banking
  • CHAPS

Other Payment Options

These methods may take up to three working days:

  • Direct Debit
  • BACS
  • Standing order under the Annual Accounting Scheme
  • Debit or corporate credit card
  • Payment at a bank or building society

VAT Payment Deadlines

If a VAT deadline falls on a weekend or bank holiday, payment must arrive earlier.
HMRC must receive the payment on the last working day before the deadline.

Adding VAT Correctly

VAT must be added correctly to avoid errors.
This helps ensure accurate VAT returns.

Invoices should include:

  • Invoice number and date
  • VAT registration number
  • Customer details
  • Description of goods or services
  • Unit price before VAT
  • Quantity
  • VAT rate and VAT amount
  • Any discounts

More guidance is available from HMRC.