VAT in the UK is a consumption tax with rates of 20%, 5%, and 0%. Businesses collect it from consumers and remit it to HMRC. Registration is required for taxable turnover over £85,000, among other criteria. Non-UK companies must also register. Changes in business details must be reported within 30 days.
Value Added Tax (VAT) in the UK
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United Kingdom
Author: Ema Stamenković
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Content accuracy validation date:
23.04.2026
Content accuracy validation time:
15:45h
VAT is a consumption tax on most UK goods and services. The end consumer pays it, but businesses collect and remit it to HMRC. Rates are 20%, 5%, and 0%, depending on the transaction.
VAT rates in the United Kingdom
- Standard rate 20% – most goods and services (e.g., clothing, electronics, fuel).
- Reduced rate 5% – specific products like: child car seats, some social housing and social services, domestic electricity/gas/district heating, some domestic energy-efficient items, domestic LPG gas and heating oil, some private renovations, some medical equipment for disabled persons.
- Zero-rated supplies 0% – e.g., domestic/international passenger transport, newspapers/magazines, basic minimally processed food, water supply, some medical articles, some children’s products, live animals, animal feed.
- Exempt supplies – e.g., entry fees for certain cultural events (museums, art exhibitions, zoos, performances), care/treatment by qualifying institutions (hospitals, hospices, nursing homes), health services by registered doctors/dentists/optometrists/pharmacists, education and vocational training by authorised bodies (schools, colleges, universities).
VAT registration in the UK
Who needs to register?
A person must register if:
- Taxable turnover exceeds £85,000 in 12 months.
- They are based outside the UK but sell UK goods or services.
- They import goods worth over £85,000 from the eu (post-brexit rules apply).
- They supply digital services to uUK consumers.
How to register?
- Step 1 – Gather business details, expected turnover, bank information.
- Step 2 – Submit the online form via HMRC’s portal.
- Step 3 – Receive VAT number (usually within 30 working days) and VAT accounting period.
Non-UK businesses
Non-UK enterprises must register if they sell products or services to UK customers. Online marketplace operators (e.g., Amazon, eBay) face special VAT rules, including new restrictions for items sold through online platforms.
Changing registration details
If business details change (e.g., address, ownership), HMRC must be updated within 30 days.
Cancelling or transferring registration
If taxable turnover falls below the deregistration threshold (£83,000) or trading stops, a person may need to cancel their VAT registration. When selling a business, VAT registration can be transferred to the new owner.
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