The standard rate of VAT in the UK is 20%, charged on most goods and services, and it has been 20% since 4 January 2011. A reduced rate of 5% and a zero rate of 0% apply to specific items, and some supplies are exempt from VAT altogether.
- Standard rate
- 20%
- Reduced rate
- 5%
- Standard rate since
- 4 January 2011
- Registration threshold
- £90,000
The three VAT rates and exempt supplies
A sale carries one of three rates of VAT, or is exempt and sits outside the tax. The official lists are on GOV.UK VAT rates; for the basics, start with what VAT is.
| Rate | VAT charged | Typical items |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Domestic fuel and power, children's car seats, some energy-saving materials, some building conversions |
| Zero | 0% | Most food, books and newspapers, children's clothes and footwear, most exports |
| Exempt | None | Insurance, most financial services, education, health services, some property lettings |
Zero-rated and exempt look the same at the till, since no VAT is added either way, but they are treated differently. Zero-rated sales are inside the VAT system: you charge 0%, the sales count towards your taxable turnover, and a VAT-registered business can reclaim the VAT on related costs. Exempt sales are outside it: no VAT is charged, they do not count towards the threshold, and related input VAT usually cannot be reclaimed.
When the rate last changed
The standard rate has been 20% since 4 January 2011 and has not moved since. If you are VAT-registered and quoting, invoicing or budgeting today, 20% is the figure to use unless the item sits in the reduced, zero or exempt groups above.
The VAT registration threshold
You must register for VAT once your VAT-taxable turnover passes £90,000 in any rolling 12-month period. The threshold has been £90,000 since 1 April 2024. There is also a forward look: if you expect to pass £90,000 in the next 30 days alone, you must register by the end of that 30-day period.
Taxable turnover is your standard, reduced and zero-rated sales added together. It excludes exempt sales and the sale of capital assets. Once you cross the line, notify HMRC within 30 days of the end of the month in which it happened, and your registration takes effect from the first day of the second month after that. You can register voluntarily below the threshold, and the deregistration threshold is £88,000. The VAT registration threshold calculator checks your position, and the official rules are on GOV.UK registration thresholds.
How to add or remove 20% VAT
Adding VAT is one multiplication. Removing it is one division, and that is the step people get wrong.
- Add VAT to a net price. Multiply the net figure by 1.20. £500 net becomes £600 gross, and the £100 difference is the VAT.
- Remove VAT from a gross price. Divide the gross figure by 1.20. £600 gross divided by 1.20 is £500 net, so the price contained £100 of VAT.
- Find the VAT in a gross price directly. At 20%, VAT is one sixth of the gross amount. One sixth of £600 is £100.
The VAT calculator adds VAT to a net price and the reverse VAT calculator removes it from a gross total; for a list of figures, use the bulk VAT calculator.
Frequently asked questions
Has the UK VAT rate changed recently?
No. The standard rate has been 20% since 4 January 2011. The reduced rate is 5% and the zero rate is 0%. The registration threshold did change, to £90,000 on 1 April 2024.
What is the VAT rate on food and children's clothes?
Most food is zero-rated, as are children's clothes and footwear and books and newspapers, so no VAT is added. The rule is most food, not all food, so check the GOV.UK list before relying on 0% for a particular item.
Does the Flat Rate Scheme change the rate I charge?
No. You still charge customers VAT at the normal rate, 20% for standard-rated sales, but pay HMRC a fixed percentage of your VAT-inclusive turnover and cannot normally reclaim input VAT. You can join if you expect VAT-taxable turnover of £150,000 or less, excluding VAT, in the next 12 months. See the Flat Rate Scheme guide and the flat rate VAT calculator.
When do I have to pay the VAT I have charged?
VAT returns are usually quarterly. The return and the payment are both due 1 calendar month and 7 days after the end of the VAT period. Since April 2022, Making Tax Digital for VAT has applied to all VAT-registered businesses, so the return must be filed through compatible software.
Last reviewed September 2026.