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Import VAT is a tax paid on goods purchased from another country. The rate of VAT charged on imported goods is usually the same as if the goods were supplied in the UK, which is the standard rate of 20%.

The 20% rate applied to most goods and services bought and sold in the UK. 

As a VAT-registered business, you can claim back the 20% VAT you have paid on most of your purchases made within the UK. Similarly, you must charge 20% on top of your normal sales. 

Here’s a full list of standard rate goods and services.

Let's say you're an IT contractor who earns over £85k in turnover per year and you are VAT registered. You will charge VAT on the sale of your services. The company that you are charging those services to will then claim the 20% back

Although the majority of food and drink is Zero Rated, there are some common edge cases where VAT is charged. They are:

Most other food and drink for human consumption

Cold takeaways (just to make it confusing)

Supplies where the business selling is not VAT registered.

Zero rate (0%) applies to goods you export from:

Great Britain to somewhere outside the UK 

Northern Ireland to somewhere outside the UK and EU 

Northern Ireland to a registered EU business

Zero rate (0%) can also apply to supplies of certain goods and services. Here’s a full list of zero-rated goods and services.

Generally this applies to goods you export.

Reverse charge is applied to transactions between VAT-registered businesses in two different EU countries.   

Here’s a full list of VAT rates for goods and services.

Transactions between businesses in different EU countries.

Items that fall into the following categories are exempt from VAT:  

Selling, leasing and letting of commercial land and buildings 

Subscriptions to membership organisations  

Here’s a full list of exempt goods and services.

Services and goods completely exempt from VAT, such as insurance and bank charges. 

No VAT is applied for goods and services bought or sold outside the UK.

No VAT also applies to certain types of transactions, such as charges levied by the government or wages paid to employees.  

Goods and services bought or sold outside the UK or for transactions outside the scope of UK VAT.

The reduced rate applies predominantly to domestic fuel or power usage, as well as car seats and mobility.   

Here’s a full list of reduced goods and services.

Domestic fuel or power usage, car seats, and mobility.

Use the slider below to select a custom rate.

The reduced rate VAT is charged on hospitality. The new rate of 12.5% is applied from 1 October 2021 to 31 March 2022

EC Goods (European Commission) are goods that have been purchased from suppliers or sold to customers outside the UK, but within the wider EU. The VAT Rate for this is Zero Rated (0%).

This is used only if you are on the Flat Rate VAT Scheme and you buy a certain asset with a VAT-inclusive price of £2,000 or more.

Effectively the same as the Reverse Charge mechanism, however is just for the Goods you purchase from the EU, rather than the services.

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