Current VAT Rate UK
The current standard VAT rate in the UK is 20%, which applies to most goods and services. However, there are exceptions. A reduced rate of 5% is charged on certain items, such as domestic gas and electricity, children’s car seats, and some energy-saving materials. Some items are zero-rated (0%), meaning VAT is technically applied but at a rate of 0%. This covers most food, books, newspapers, children’s clothes, and public transport. In addition, some goods and services are completely exempt from VAT, such as financial services, insurance, health, postal services, and education.
VAT is an indirect tax collected by the government through businesses on the sale of taxable goods and services. Businesses add VAT to their prices and then pass it on to HMRC.
Read More About VAT:
Brief History and Facts about VAT Tax
How do you pay VAT?
Any business with a turnover of over £90,000 in the last 12 months is required to pay VAT to the HM Revenue and Customs (department of government of the UK, responsible for collection of tax).
Businesses can pay VAT in different ways. The speed of each method depends on how the payment is sent.
Same day or next day payments
These reach HMRC’s account quickly:
- Online or telephone banking (Faster Payments)
- Clearing House Automated Payment System (CHAPS)
Payments that usually take up to 3 working days
- Direct Debit – but the first time you set one up, it can take longer, so arrange it early.
- BACS (Bankers Automated Clearing Services)
- Standing order – only if you use the Annual Accounting Scheme
- Online card payment – with a debit card or a corporate credit card (personal credit cards are not accepted)
- At a bank or building society – only if HMRC has sent you a paying-in slip
Important to remember
- Your payment must clear HMRC’s account by the VAT deadline, not just be sent on that day.
- Payments made on weekends or bank holidays normally clear on the next working day.
- Always check you’re using the correct VAT reference number to avoid delays.
History of VAT in the UK
VAT was introduced in the UK on 1 April 1973, when the country joined the European Economic Community (now the EU). It replaced the Purchase Tax, which had been in place since 1940 during the Second World War. The first VAT standard rate in 1973 was 10%.
Since then, the rate has changed several times: it was cut to 8% in 1974, increased again in later years, and set at 17.5% in 1991. During the 2008 financial crisis, it was temporarily reduced to 15% to encourage spending. Finally, in 2011, the standard rate was raised to 20%, where it has remained ever since.
While the UK was part of the European Union, EU rules required a minimum VAT standard rate of 15% across member states. After Brexit, the UK is no longer bound by this rule, but the government has chosen to keep the standard rate at 20%.
| From | To | Standard VAT Rate |
|---|---|---|
| 1 April 1973 | July 1974 | 10% |
| July 1974 | 17 June 1979 | 8% |
| 18 June 1979 | 18 March 1991 | 15% |
| 19 March 1991 | 30 November 2008 | 17.5% |
| 1 December 2008 | 31 December 2009 | 15% |
| 1 January 2010 | 3 January 2011 | 17.5% |
| 4 January 2011 | Present | 20% |
When paying VAT
Getting VAT right on your invoices is important for two reasons: it ensures your customers are charged correctly, and it allows you to submit accurate VAT Returns to HMRC.
What a VAT invoice must include
A full VAT invoice should clearly show:
- A unique invoice number
- The date of the invoice and the time of supply (also called the tax point, if different)
- Your business name, address, and VAT registration number
- Your customer’s name and address
- A clear description of the goods or services supplied
For each item or service on the invoice, you must also show:
- The unit price excluding VAT
- The quantity or extent of goods or services
- The rate of VAT charged (for example, 20%, 5%, or 0%)
- The total amount before VAT
- The VAT amount charged
- The total amount including VAT
- Any cash discount offered
Types of VAT invoices
- Full VAT invoice – the standard format, used in most cases.
- Simplified invoice – can be used if the total is under £250 (including VAT). This requires fewer details.
- Modified invoice – can be used by retailers for sales over £250, showing VAT-inclusive pricing.
| Type of Invoice | When You Can Use It | What It Must Show |
|---|---|---|
| Full VAT Invoice | Standard format – required for most business-to-business sales. | – Unique invoice number – Invoice date and tax point (if different) – Supplier’s name, address, VAT number – Customer’s name and address – Description of goods or services – Quantity or extent of supply – Unit price excluding VAT – Rate of VAT for each item (e.g. 20%, 5%, 0%) – Total amount before VAT – VAT charged – Total including VAT – Any discounts |
| Simplified Invoice | For sales under £250 (including VAT) – often used in shops and hospitality. | – Supplier’s name, address, VAT number – Invoice date – Description of goods or services – Total amount including VAT – VAT rate charged OR the total VAT amount |
| Modified Invoice | For retail sales over £250 where prices are shown VAT-inclusive. | – All details required on a full VAT invoice – A clear statement that prices include VAT |
Why this matters
Accurate invoices help avoid mistakes on your VAT Return and reduce the risk of HMRC penalties. They also provide your customers with the correct evidence to reclaim VAT if they are VAT-registered.
2026 VAT rates for all countries over the world.
European Union (EU-27) – VAT standard rates (March 2026)
| Country | Standard VAT rate |
|---|---|
| Austria | 20% |
| Belgium | 21% |
| Bulgaria | 20% |
| Croatia | 25% |
| Cyprus | 19% |
| Czechia | 21% |
| Denmark | 25% |
| Estonia | 20% |
| Finland | 24% |
| France | 20% |
| Germany | 19% |
| Greece | 24% |
| Hungary | 27% |
| Ireland | 23% |
| Italy | 22% |
| Latvia | 21% |
| Lithuania | 21% |
| Luxembourg | 16% |
| Malta | 18% |
| Netherlands | 21% |
| Poland | 23% |
| Portugal | 23% |
| Romania | 19% |
| Slovakia | 20% |
| Slovenia | 22% |
| Spain | 21% |
| Sweden | 25% |
Non EU – VAT standard rates (March 2026)
| Country | Standard VAT Rate |
|---|---|
| Andorra | 4.5% |
| Bangladesh | 15% |
| Cameroon | 19.25% |
| Chile | 19% |
| China | 13% / 9% / 6% (13% main) |
| Côte d’Ivoire | 18% |
| Egypt | 14% |
| Eswatini (Swaziland) | 15% |
| Faroe Islands | 25% |
| Fiji | 9% |
| Ghana | 12.5% |
| Iceland | 24% |
| Indonesia | 11% |
| Iran | 9% |
| Israel | 17% |
| Jordan | 16% |
| Kazakhstan | 12% |
| Kenya | 16% |
| Kyrgyzstan | 12% |
| Laos | 10% |
| Lebanon | 11% |
| Madagascar | 20% |
| Malawi | 16.5% |
| Mali | 18% |
| Mauritius | 15% |
| Moldova | 20% |
| Mongolia | 10% |
| Montenegro | 21% |
| Morocco | 20% |
| Mozambique | 17% |
| Namibia | 15% |
| Nepal | 13% |
| Niger | 18% |
| Nigeria | 7.5% |
| North Macedonia | 18% |
| Norway | 25% |
| Oman | 5% |
| Palestine | 16% |
| Paraguay | 10% |
| Philippines | 12% |
| Russia | 20% |
| Rwanda | 18% |
| Samoa | 15% |
| Saudi Arabia | 15% |
| Senegal | 18% |
| Serbia | 20% |
| Seychelles | 15% |
| Sierra Leone | 15% |
| South Africa | 15% |
| South Korea | 10% |
| Sri Lanka | 15% |
| Suriname | 10% |
| Switzerland | 7.7% |
| Taiwan | 5% |
| Tajikistan | 18% |
| Tanzania | 18% |
| Thailand | 7% |
| Tunisia | 19% |
| Turkey | 20% |
| Turkmenistan | 15% |
| Uganda | 18% |
| Ukraine | 20% |
| United Arab Emirates | 5% |
| Uruguay | 22% |
| Vietnam | 10% |
| Zambia | 16% |
| Zimbabwe | 14.5% |
Global List of Countries Without VAT (as of March 2026)
| Country | Standard Tax |
|---|---|
| Brazil | No single VAT – uses ICMS, IPI, PIS/COFINS (complex indirect tax system) |
| Cuba | No general VAT – turnover and sales taxes apply |
| Eritrea | No broad VAT system |
| Iraq | No general VAT widely applied |
| Jamaica | General Consumption Tax (GCT), ~16.5% |
| Libya | No general VAT system |
| Malaysia | No VAT – Sales and Service Tax (SST) reintroduced |
| Maldives | GST/VAT hybrid – 6% (not a pure VAT) |
| Mexico | IVA (Impuesto al Valor Agregado) – 16% (VAT-like but locally classified differently) |
| Myanmar | Commercial Tax 5% – VAT planned but not yet in place |
| New Zealand | GST 15% (not VAT) |
| Panama | ITBMS 7% (sales tax) |
| Qatar | 5% VAT planned, not implemented as of March 2026 |
| Singapore | GST 9% (not VAT) |
| Solomon Islands | GST/VAT hybrid – 10% |
| Somalia | No consistent VAT regime |
| Sudan | No consistent VAT (varies regionally) |
| Syria | No consistent VAT widely applied |
| Timor-Leste | No VAT widely implemented |
| Yemen | No consistent VAT regime |