Value Added Tax (VAT) is a tax on most goods and services sold in the UK. Businesses charge VAT to customers and pay it to HMRC, minus VAT they have paid on their own purchases.
Do you need to register for VAT?
You must register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period (the current UK registration threshold). You can also register voluntarily below that level — useful if you sell mainly to other VAT-registered businesses and want to reclaim input VAT.
The deregistration threshold is £88,000. Always confirm the latest figures on GOV.UK.
UK VAT rates
- Standard rate 20% — most goods and services (unchanged since 4 January 2011).
- Reduced rate 5% — includes domestic fuel and power, children’s car seats and some energy-saving materials.
- Zero rate 0% — most food, books, children’s clothes and many exports. Still inside the VAT system, so registered businesses can usually reclaim related input VAT.
- Exempt — insurance, finance, education and health services. Outside VAT; input VAT is usually not reclaimable.
Use the free VAT calculator to add or remove VAT at 20%, 5% or 0%, or try the reverse VAT calculator when you only have a gross price.
Last reviewed August 2026. For general information only — confirm rates and rules with HMRC or a qualified accountant.