VAT Rates UK 2025

  • Standard Rate – 20%
    Applies to most goods and services, including electronics, adult clothing, and restaurant meals.
  • Reduced Rate – 5%
    Applies to specific goods and services such as:
    • Children’s car seats
    • Domestic energy (e.g., gas and electricity for residential use)
    • Sanitary products
    • Certain mobility aids for older people
  • Zero Rate – 0%
    Applies to essential items like:
    • Most food items
    • Children’s clothing and footwear
    • Printed books and newspapers
    • Public transport fares
  • Exempt Categories (outside the VAT system)
    Includes services such as:
    • Education
    • Healthcare
    • Insurance
    • Financial services
    • Certain cultural services (e.g., museum admissions)

VAT Registration Threshold (2025)

  • Businesses must register for VAT if their taxable turnover exceeds £90,000 in a 12-month rolling period.
  • The de-registration threshold is £88,000.

Notes

  • These rates have remained stable since 2011.
  • The UK government periodically reviews VAT structure, but no new rates have been introduced for 2025 as of now.
  • Zero-rated goods still require VAT accounting and reporting, even though no VAT is charged to the customer.

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