UK VAT in 2026

UK VAT remains 20%, with 5% and zero rates for selected supplies and a temporary 5% rate for certain children’s meals and family attractions in 2026. The £90,000 threshold, MTD, quarterly filing, large-payer rules, B2B invoicing, Brexit/Windsor, PVA, Intrastat and mandatory e-invoicing from April 2029 are covered.

The UK continues to apply a standard VAT rate of 20% to most goods and services, while a reduced rate of 5% and a zero rate apply to specific categories. Examples include children’s car seats and domestic energy at the reduced rate, while most food and children’s clothing are zero-rated.

As a temporary measure, the UK is also applying a 5% VAT rate from June 25, to September 1, 2026 to certain children’s meals and admission to qualifying family attractions and events.

One important change compared with older VAT guidance is the registration threshold. Since April 1, 2024, businesses generally have to register for VAT when their taxable turnover exceeds £90,000 (~EUR 105,200) in a rolling 12-month period, while voluntary registration below this level remains possible.

The threshold does not generally apply to non-established taxable persons: an overseas business making taxable supplies in the UK may have to register regardless of the value of those supplies.

VAT registration is normally completed through the Tax Authority’s online service, while the paper VAT1 procedure is now used only in particular circumstances.

VAT returns are normally submitted quarterly, although monthly reporting may be available, particularly for businesses regularly receiving VAT repayments. The standard filing and payment deadline is generally one calendar month and seven days after the end of the VAT accounting period.

Large VAT payers are subject to additional rules. Businesses submitting quarterly returns that owe more than £2.3 million of VAT within 12 months or less can enter the Tax Authority’s Payments on Account regime, requiring advance payments during each VAT quarter followed by a balancing payment.

Digital VAT compliance is now a general requirement. Since April 2022, all VAT-registered businesses, regardless of turnover, have been required to keep relevant VAT records digitally and submit their returns using Making Tax Digital-compatible software, unless they qualify for an exemption.

VAT invoicing requirements mainly concern B2B transactions. A VAT-registered supplier must generally issue a VAT invoice when supplying standard-rated or reduced-rated goods or services to another VAT-registered person, while retailers do not normally need to provide a VAT invoice to non-VAT-registered consumers. Simplified VAT invoices can generally be used where the total value of the supply does not exceed £250 (~EUR 300) including VAT.

Brexit also changed the treatment of cross-border goods. Movements between Great Britain and EU Member States are generally treated as imports and exports, while special rules continue to apply to movements of goods between Northern Ireland and the EU under the Windsor Framework. Intrastat reporting therefore now relates to qualifying Northern Ireland-EU movements rather than ordinary Great Britain-EU trade.

UK VAT-registered businesses can also use Postponed VAT Accounting (PVA) to account for eligible import VAT through their VAT return rather than paying it immediately at import, while a C79 certificate remains relevant where import VAT has actually been paid.

Another major digital change is already on the horizon: the UK government has announced that all VAT invoices will have to be issued in a specified electronic format from April 2029, significantly extending the country's VAT digitalisation beyond the current MTD regime.