Current VAT Rate in United Kingdom (2025)

Current VAT Rates

Historical VAT Rate Changes

• 2025: Current standard rate (no change)
• 2011: Rate increased from 17.5% to 20%
• 2010: Rate restored from temporary reduction
• 2008: Temporary reduction during financial crisis
• 1991: Rate increased from 15%
• 1973: VAT introduced replacing Purchase Tax

• 2025: Current standard rate of 20% (no change)
• 2020: Temporary reduction during pandemic
• 2011: Rate increased from X% to Y%
• 2008: Temporary reduction during financial crisis
• 1991: VAT system introduced at X%

Economic Impact

VAT contributes approximately 20-30% to United Kingdom's total tax revenue. The current rate structure balances revenue generation with economic competitiveness within the Europe region.

Zero-Rated Items

The following items are zero-rated for VAT in United Kingdom:

• Exports of goods and services
• International transportation
• Some basic food items
• Children's clothing (some countries)
• Books and newspapers (some countries)
• Prescription medications

• Exports of goods and services
• International transportation
• Basic food items (specific list varies)
• Children's clothing and footwear
• Books and newspapers
• Prescription medications

VAT Exempt Items

The following are exempt from VAT in United Kingdom (no VAT charged, no input VAT recovery):

• Financial services
• Insurance services
• Healthcare and medical services
• Education and training
• Postal services
• Charitable activities

• Financial services
• Insurance services
• Healthcare and medical services
• Education and training
• Postal services
• Charitable activities

Reduced Rate Applications

Items subject to reduced VAT rates in United Kingdom:

• 5% rate: Various essential goods and services

VAT Registration

• Registration Threshold: 85,000 GBP annual turnover
• Voluntary Registration: Available below threshold
• Registration Process: Online via tax authority website
• Processing Time: Typically 2-4 weeks

VAT Returns and Payment

• Filing Frequency: Varies
• Filing Deadline: End of month following period
• Payment Methods: Bank transfer, online payment
• Late Filing Penalties: Varies by amount and delay

Cross-Border Trade

Special considerations for international transactions:

• Intra-EU Trade: Not applicable (non-EU country)
• Imports: VAT payable at point of entry
• Exports: Generally zero-rated
• Digital Services: Special rules may apply

Nearby Countries

What is the current VAT rate in United Kingdom?

The standard VAT rate in United Kingdom is 20% as of 2025. This applies to most goods and services unless they qualify for reduced rates or exemptions.

How do I calculate VAT in United Kingdom?

To add VAT: multiply the net amount by 20%. To remove VAT from a gross amount: divide by 1.20. Use our calculator above for instant results.

Who needs to register for VAT in United Kingdom?

Businesses with annual turnover exceeding 85,000 GBP must register for VAT. Voluntary registration is available for businesses below this threshold.

Can I reclaim VAT in United Kingdom?

VAT-registered businesses can generally reclaim input VAT on business purchases. Non-EU tourists may claim VAT refunds on qualifying purchases when leaving the country.