Value Added Tax is charged on most goods and services sold in the UK. Here's when you need to register and how rates work.
| Rate | Applies to |
|---|---|
| 20% (Standard) | Most goods and services |
| 5% (Reduced) | Some goods — home energy, children's car seats, sanitary products |
| 0% (Zero-rated) | Most food, books, children's clothes, public transport |
| Exempt | Insurance, finance, education, health services (different from zero-rated for reclaim purposes) |
You must register for VAT once your taxable turnover exceeds £90,000 in any rolling 12-month period. You can also register voluntarily below this threshold — sometimes worthwhile if you want to reclaim VAT on purchases.
Small businesses (turnover under £150,000) can opt for the Flat Rate Scheme — pay a fixed percentage of turnover as VAT rather than tracking VAT on every purchase and sale, simplifying bookkeeping at the cost of some precision.
Add or remove VAT from a price.
Use the VAT Calculator →VAT rates and the registration threshold are updated periodically. Verify with HMRC before registering or invoicing.