What are the different VAT rates in the UK?
Answered 11 March 2026
Here is a comprehensive answer on the different VAT rates in the UK.
What the law says
There are three rates of VAT applicable to taxable supplies in the UK, plus a category of exempt and out-of-scope supplies:
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Standard rate – 20% Charged under section 2 of the Value Added Tax Act 1994 (VATA 1994). The rate was increased from 17.5% to 20% with effect from 4 January 2011. Legislation has locked this rate so it cannot exceed 20%.
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Reduced rate – 5% Charged under section 29A of VATA 1994 on goods and services listed in Schedule 7A to that Act. This rate is also locked and cannot exceed 5%.
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Zero rate – 0% Applies to goods and services listed in Schedule 8 to VATA 1994 (under section 30). Zero-rated supplies are still taxable supplies, meaning VAT-registered businesses can reclaim input tax on related costs.
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Exempt supplies Supplies falling within Schedule 9 to VATA 1994 (introduced by section 31) are exempt from VAT. These are not taxable supplies, and businesses generally cannot reclaim input tax on costs used to make them.
HMRC guidance / practice
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Taxable supplies (standard-rated, reduced-rated, and zero-rated) are distinguished from exempt supplies and supplies outside the scope of UK VAT.
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Standard rate applies to most goods and services.
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Reduced rate (5%) examples include children's car seats and domestic fuel and power. It also applies in construction contexts, such as:
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Conversion of non-residential buildings into qualifying dwellings
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Renovation or alteration of empty residential premises
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Installation of energy-saving materials
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Zero rate examples include food, books, and passenger transport. Zero-rating also applies to certain construction work for disabled people and conversion of non-residential buildings into dwellings.
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Input tax recovery: Businesses can reclaim VAT on costs relating to standard-rated, reduced-rated, and zero-rated supplies, but generally cannot reclaim input tax on costs used to make exempt supplies.
Summary Table
| Rate | Percentage | Legal basis |
|---|---|---|
| Standard rate | 20% | VATA 1994, s.2 |
| Reduced rate | 5% | VATA 1994, s.29A & Sch. 7A |
| Zero rate | 0% | VATA 1994, s.30 & Sch. 8 |
| Exempt | N/A (no VAT) | VATA 1994, s.31 & Sch. 9 |
| Outside scope | N/A | Place of supply rules |
Citation sources
PART 1 Principal rates etc Tax lock VAT lock 2 1 The rate of value added tax for the time being in force under section 2 of VATA 1994 (standard rate) shall not exceed 20% during the VAT lock period. 2 The rate of value added tax for the time being in force under section 29A of VATA 1994 (reduced rate) shall not exceed 5% during the VAT lock period. 3 No supply specified in Schedule 7A to VATA 1994 (charge at reduced rate) at the beginning of the VAT lock period may be removed from it under secti
You can normally reclaim input tax that relates to: supplies you make which are liable at the standard rate, reduced rate or the zero rate (read section 3) supplies you make which are outside the scope of UK VAT but which would be taxable supplies if they were made in the UK supplies of services you make to a person who belongs outside the UK, or supplies of services you make which are directly linked to the export of goods to a place outside the UK — and the making of arrangements for such supp
Supplies of goods and services chargeable at the standard rate, reduced rate or at the zero rate are ’taxable supplies’. Supplies not chargeable at the standard rate, the reduced rate, or zero rate are ‘exempt supplies’. Depending on where a supply is made, supplies can be outside the scope of UK VAT.
These are goods and services that are standard-rated, reduced-rated or zero-rated when sold by a business, which could include a charity, that’s registered for VAT: the standard rate is charged on most goods and services the reduced rate is charged on goods and services listed in Schedule 7A to the VAT Act, examples include children’s car seats and domestic fuel and power the zero rate applies to goods and services listed in Schedule 8 to the VAT Act, examples include food, books and passenger t
In addressing partial exemption questions (including whether any business is partly exempt) the first step must always be to establish or confirm the liabilities of their supplies. Supplies are exempt for VAT in the UK if they are otherwise within the scope of UK VAT, fall within any of the groups of Schedule 9 of the VAT Act as introduced by section 31 and do not fall within Schedule 8 to the Act. For the purposes of partial exemption, supplies with a place of supply outside the UK, that would
The changes only affect the zero-rating for protected buildings. There are no changes to other zero and reduced rates for construction work. A full list of these is set out in paragraph 2.1 of Notice 708. These include: A zero rate for conversion of any non-residential building into a dwelling or dwellings or into a relevant residential building for a housing association. See Section 6 of Public Notice 708 Buildings and construction A reduced VAT rate of 5 per cent for conversions of non-residen
Part 1 Rates etc Value added tax Rate of value added tax 3 1 In section 2(1) of VATA 1994 (rate of VAT ), for “17.5 per cent” substitute “ 20 per cent ” . 2 In section 21(4) of that Act (restriction on value of imported goods), for “28.58 per cent” substitute “ 25 per cent ” . 3 The amendment made by subsection (1) has effect in relation to any supply made on or after 4 January 2011 and any acquisition or importation taking place on or after that date. 4 The amendment made by subsection (2) has