UK VAT — Rates & categories
UK VAT rates (2025/26)
The UK has three VAT rates plus an exempt category. Most goods and services are at 20% (standard rate). A short list of essentials is at 5% (reduced rate). A longer list of essentials is at 0% (zero rate). A separate list is exempt. Every row below links to the HMRC source it came from.
Standard rate — 20%
The default rate that applies to anything not on one of the lists below.
| Item | Rate | Notes | Source |
|---|---|---|---|
| Most goods and services (default) | 20% | HMRC · 2026-05-12 | |
| Adult clothing & footwear | 20% | HMRC · 2026-05-12 | |
| Alcoholic drinks | 20% | HMRC · 2026-05-12 | |
| Confectionery (sweets, chocolate) | 20% | HMRC · 2026-05-12 | |
| Hot takeaway food | 20% | Cold takeaway is mostly zero-rated. | HMRC · 2026-05-12 |
| Restaurant meals (eat-in) | 20% | HMRC · 2026-05-12 | |
| Soft drinks (sweetened) | 20% | HMRC · 2026-05-12 |
Reduced rate — 5%
A small list of essentials and welfare items. The rate is set by HMRC and can change with the Budget.
| Item | Rate | Notes | Source |
|---|---|---|---|
| Children's car seats | 5% | HMRC · 2026-05-12 | |
| Domestic fuel & power (gas/electricity for home use) | 5% | HMRC · 2026-05-12 | |
| Energy-saving materials (insulation, solar, heat pumps) | 0% | Was 5% until 2022; zero-rated through March 2027 then back to 5%. | HMRC · 2026-05-12 |
| Mobility aids for the elderly (when installed) | 5% | HMRC · 2026-05-12 | |
| Stop-smoking products | 5% | HMRC · 2026-05-12 | |
| Welfare advice | 5% | Supplied by a charity or state-regulated body. | HMRC · 2026-05-12 |
Zero rate — 0%
You still charge VAT, just at 0%. You can still reclaim input VAT on related purchases — this is the key difference vs Exempt.
| Item | Rate | Notes | Source |
|---|---|---|---|
| Most food (cold takeaway, groceries, raw ingredients) | 0% | Hot, confectionery, soft drinks, alcohol are exceptions. | HMRC · 2026-05-12 |
| Children's clothing & footwear | 0% | HMRC · 2026-05-12 | |
| Books, e-books, newspapers | 0% | HMRC · 2026-05-12 | |
| Prescription medicines (NHS) | 0% | HMRC · 2026-05-12 | |
| Public transport (passenger fares) | 0% | HMRC · 2026-05-12 | |
| Exports of goods to outside the UK | 0% | HMRC · 2026-05-12 | |
| Construction of new dwellings | 0% | Conversions are usually 5%. | HMRC · 2026-05-12 |
Exempt from VAT
You do not charge VAT and you cannot reclaim input VAT on related purchases. Often the worst of both worlds for businesses that have mixed taxable and exempt supplies (partial-exemption rules apply).
| Item | Rate | Notes | Source |
|---|---|---|---|
| Insurance | Exempt | HMRC · 2026-05-12 | |
| Postage stamps (Royal Mail) | Exempt | HMRC · 2026-05-12 | |
| Health treatment by registered professionals (doctor, dentist, optician) | Exempt | HMRC · 2026-05-12 | |
| Most education & training (by eligible bodies) | Exempt | HMRC · 2026-05-12 | |
| Gambling | Exempt | HMRC · 2026-05-12 | |
| Most finance & investment fees | Exempt | HMRC · 2026-05-12 |
Outside the scope of UK VAT
Some transactions are outside UK VAT entirely — e.g. statutory fees paid to HMRC or other government bodies, certain donations, and most B2B services supplied to overseas customers (the place of supply rules apply). These don't appear on your VAT return at all.
Frequently asked questions
What's the difference between zero-rated and exempt?
Zero-rated supplies are still taxable, just at 0% — you can reclaim input VAT on related purchases. Exempt supplies are outside the VAT system — you cannot reclaim input VAT on related purchases. Books are zero-rated; insurance is exempt.
Is VAT charged on second-hand goods?
Yes, at the standard rate of 20% unless covered by a special scheme (the Margin Scheme for cars, antiques, collectibles, etc., where VAT is charged only on the margin, not the full price).
Are energy-saving materials still zero-rated?
Yes — the temporary zero rate on installation of insulation, solar panels and heat pumps runs through 31 March 2027. After that it reverts to 5%. Source HMRC; reviewed 2026-05-12.
Do I charge VAT on exports?
Exports of goods outside the UK are zero-rated (you charge 0% but can reclaim input VAT). Services to overseas customers may be outside the scope of UK VAT entirely — the place-of-supply rules apply.
When did the standard VAT rate change last?
January 2011 — raised from 17.5% to 20%. It has been 20% ever since.