UK VAT Rate

VAT rate UK. What are the VAT rates in England? Which VAT is applicable in Great Britain? What is the reduced value-added tax rate in the UK? Which is the British standard VAT level? What is the typical UK VAT rate?

UK VAT number format

Format for the EU VAT number: GB000000000, GB0000000000005, GBGD0006 or GBHA000.

What is the standard VAT rate in the UK?

The standard UK VAT rate: 20%

A restaurant must always charge 20% VAT on any food eaten in their designated areas. All hot food must be charged with 20% VAT even if it is takeaway including home deliveries. The only exception is cold takeaway food.

What is the reduced VAT rate in the UK?

Reduced UK VAT rate: 5%

Heating oil and electricity for 60+, energy-saving materials for residential purposes (will possibly change), renovations, conversions, and refurbishments, car seats for children, contraception, installation of facilities for the elderly, smoking cessation products like nicotine patches, welfare counselling, sanitary products for women, grant-funded installation or connections of the heating equipment, safety products, and gas supply, as well as some caravans.

Zero GB VAT rate: 0%

The UK, in addition to the standard VAT exempt services like banking, education, healthcare and insurance, also have a quite extensive zero-VAT system which includes: Most groceries, drinks and food for human consumption (Except: pet food, catering, alcoholic content, confectionery, crisps and snacks, hot food, sports drinks, hot takeaways, ice cream, soft drinks and mineral water), sewerage services and water, passenger transport >10 people, printed books and audiobooks for the blind, but e-books are 20%, equipment for blind including low vision aids and glasses, construction of houses, burial, transportation, investment gold including bars (>995 fineness) and coins covered in HMRC Notice 701/21A (but silver 20%).

Medicines and aids for the disabled, clothes and shoes for children, some protective equipment like CE-marked helmets, industrial protection wear, sports activities, betting and gambling, cultural activities by public authorities and visits to museums, art exhibitions, zoos and performances, Antiques & works of art if sold to a public body, most activities and sales from charities, books, children’s books, maps and charts, magazines, newspapers, notes (music), brochures, leaflets and pamphlets (Except: exercise books, letterheads, posters = 20%).

Aircraft repair and maintenance, public bridges and tunnels (private infrastructure is 20%), let of garages and parking spaces and some types of caravans.

Are Scotland, Wales and Northern Ireland included in the UK VAT system?

Scotland, Wales and Northern Ireland are included in the United Kingdom of Great Britain for the purpose of VAT and all territories have the same VAT as the stated VAT rate for the UK.

The Isle of Man is also included which is not as obvious. It has been switching affiliation between Norway during the Viking Age and then Scotland and England alternately. It is formally not part of the UK today (but is subordinate to the British royal family and the Queen..) but it is classified to the UK for VAT purposes since 1979. If you sell something to a private person or a company on the Isle of Man, this should count as a sale to the UK, and hence this will be a sale inside the EU from a VAT perspective. The same applies if you buy anything from the Isle of Man, then it would count as a purchase inside the EU for your records and accounting.

Electronic services in the UK

When you, as a foreign EU company, are selling digital products or electronic services to a private individual in the UK, you should generally invoice with 20% VAT (UK VAT).

VAT rates for EU countries

How to register for VAT in the UK?

Guide for VAT registration in the UK
England is very generous to small business owners. Do you have sales below £90,000 (2024) per year in the UK you will not have to register for VAT! That is a good reason to look into moving out to the British islets if you are a freelancer for example. This is a rather high limit, as you can see in this comparison table of VAT registration limits in other countries. Mainland Europe has significantly lower borderlines for when you need to register for sales tax.

Exemption of VAT on the British Isles

British Overseas Territory consisting of Anguilla, British Antarctic, British Virgin Islands, British Indian Ocean Territory, Cayman Islands, Falkland Islands, Montserrat, Pitcairn, Saint Helena, Ascension and Tristan da Cunha, South Georgia and the South Sandwich Islands, and the Turks and Caicos Islands. These British overseas territories are not included in the EU VAT and customs union. They are not included in the EU VAT area.

Those living in these areas received British citizenship in the year 2002, and thus people from these territories are actually European citizens and can work in the EU countries on the same terms as the “real” Europeans. But if you sell something to a company or a person in the aforementioned areas this would be treated as exports outside the European Union (just as the Finnish Åland Island).

Then we have the really intricate exceptions: The British Channel Islands (Jersey, Guernsey, Alderney, Sark, and Herm) and the semi-British area of Gibraltar, south of Spain. As for the islands, they are in some contexts regarded to be within the EU and sometimes not. You can read more details about what applies for example to Guernsey here. The important thing for us in this context is whether they are considered to be within the EU VAT area or not?. As for that question, the answer is clear: The British Channel Islands are not part of the EU VAT area. Trades to and from these islands and Gibraltar will, therefore, count as exports outside the EU or imports into the EU if you buy goods or services from there.