Calculate UK VAT at standard 20%, reduced 5%, or zero rate. Add VAT to a net price or extract it from a gross price instantly.
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UK VAT Rates and How to Calculate Them
The UK has three VAT rates administered by HMRC. Knowing which rate applies to your goods or services — and how to correctly add or remove VAT — is essential for accurate invoicing and VAT return filing.
UK VAT Rates (2024/2025)
Standard rate 20%: Most goods and services — retail, professional services, electronics, restaurant meals, clothing
Reduced rate 5%: Home energy (gas, electricity), children's car seats, mobility aids, some renovation work, sanitary products, contraceptive products
Zero rate 0%: Food (most unprocessed), children's clothing and footwear, books and newspapers, prescription medicines, public transport, new residential housing
Exempt: Financial services, insurance, health services, education, betting and gaming, burial and cremation
UK VAT Registration
Businesses must register for VAT when their taxable turnover exceeds £90,000 in a rolling 12-month period (threshold increased from £85,000 in April 2024). Voluntary registration is possible below this threshold and allows reclaiming input VAT on purchases.
Flat Rate Scheme
Small businesses with turnover under £150,000 can use the Flat Rate Scheme, paying a fixed percentage of gross turnover to HMRC instead of the full 20%. The flat rate varies by trade sector (e.g., 12% for consultants, 9% for catering). Simple and often more profitable for service businesses with few expenses.
Frequently Asked Questions
The UK VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period, as of April 2024 (up from £85,000). If you exceed this, you must register within 30 days. The deregistration threshold is £88,000.
To add 20% VAT to a net price: multiply by 1.20. To remove 20% VAT from a gross price: divide by 1.20. Example: £500 net + VAT = £600 gross. £600 gross ÷ 1.20 = £500 net. The VAT fraction for 20% is 1/6 (multiply gross by 1/6 to find the VAT amount).
Most basic food is zero-rated (0% VAT) in the UK — including raw meat, fish, vegetables, bread, and cereals. However, catering and restaurant food (eating in or hot takeaway) is standard rated at 20%. Crisps, confectionery, and most soft drinks are also standard rated. The rules are notoriously complex.
Yes. Since 1 January 2021, UK VAT rules are independent of EU VAT directives. Imports from the EU are treated like imports from anywhere else — import VAT is due. UK businesses selling to EU consumers may need to register for VAT in EU countries or use the EU's One Stop Shop (OSS) scheme for B2C digital services.