UK VAT Rates Explained
Updated June 2026 · 5 min read · Free calculator inside
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VAT (Value Added Tax) is a consumption tax added to most goods and services in the UK. The headline rate is 20%, but reduced and zero rates apply to certain items. This guide explains the rates, what they cover, and the simple maths for adding or removing VAT.
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| Rate | % | Examples |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Domestic energy, children's car seats |
| Zero | 0% | Most food, books, children's clothing |
| Exempt | — | Insurance, postage, financial services |
Zero-rated items are taxable at 0% (and can be reclaimed by businesses); exempt items are outside VAT entirely.
How to add VAT
To add 20% VAT, multiply the net price by 1.20. So £100 net becomes £120 gross, of which £20 is VAT.
How to remove VAT
To find the VAT inside a gross (VAT-inclusive) price, divide by 1.20 — not subtract 20%. £120 gross ÷ 1.2 = £100 net, so the VAT is £20. Subtracting 20% would wrongly give £96.
When does a business have to register?
A business must register for VAT once its VAT-taxable turnover passes the registration threshold — £90,000 as of 2024, the latest confirmed figure. Below that, registration is optional but can let a business reclaim VAT on its purchases.
Frequently Asked Questions
What is the current UK VAT rate?
The standard rate is 20% and applies to most goods and services. Reduced (5%) and zero (0%) rates apply to specific categories.
How do I work out 20% VAT?
To add VAT, multiply the net price by 1.2. To find VAT within a gross price, divide by 1.2 and subtract the result from the gross.
Is there VAT on food in the UK?
Most basic foodstuffs are zero-rated, but there are exceptions such as hot takeaway food, confectionery, and restaurant meals, which are standard-rated at 20%.
Add or remove VAT in one click
Skip the maths — get an instant, up-to-date figure with our free calculator.
Open the VAT Calculator →Related Guides
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⚠️ Disclaimer: This guide is for general information only and does not constitute financial, tax, or legal advice. Rates and thresholds can change — always check the latest figures on GOV.UK and consult a qualified professional before making decisions.