The standard UK VAT rate is 20%. A reduced rate of 5% and a zero rate of 0% apply to some goods and services. A few things are exempt from VAT or fall outside it, so they carry no VAT at all.
Here are the rates at a glance.
| Rate | Figure | Applies to |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Home energy, children’s car seats, some building work |
| Zero | 0% | Most food, books, newspapers, children’s clothes |
| Exempt | No VAT | Insurance, finance, education, health, betting |
Rates are set by HMRC and can change. The current list is on GOV.UK.
[ Infographic: The four UK VAT rates ]
Brief: four clear blocks for 20%, 5%, 0% and exempt, each with two or three example items.
Alt text: UK VAT rates shown as standard 20 percent, reduced 5 percent, zero 0 percent and exempt, with examples.
Caption: The four VAT categories in the UK at a glance.
Standard rate: 20%
The standard rate covers most goods and services in the UK. If an item does not have a reduced, zero or exempt status, the standard rate applies.
Everyday examples at 20% include:
- Electronics, furniture and most high street shopping
- Adult clothing and footwear
- Alcohol, soft drinks and sweets
- Professional fees, such as a solicitor or a web designer
- Restaurant meals and hot takeaway food
The standard rate has been 20% since 4 January 2011. Before that it was 17.5%.
Reduced rate: 5%
Some goods and services carry a reduced rate of 5%. The main ones are:
- Gas and electricity for your home
- Children’s car seats and booster seats
- Mobility aids fitted for older people
- Products that help people stop smoking, such as nicotine patches
- Some conversions and renovations of homes
The reduced rate often depends on the exact item and how it is used, so the full rules sit on GOV.UK.
Zero rate: 0%
Zero rated goods and services are taxed, but the rate is set at 0%. The customer pays no VAT, and the sale still counts inside the VAT system.
Common zero rated items include:
- Most food and drink from shops, such as bread, milk and vegetables
- Books, newspapers and magazines
- Children’s clothes and shoes
- Prescription medicines
- Public transport, such as trains and buses
- Period products
Note that hot food, restaurant meals, sweets, crisps and alcohol are not zero rated. They sit at the standard rate.
Items that are exempt from VAT
Exempt items sit outside the VAT system. No VAT is charged on the sale, and the business cannot claim back the VAT on costs linked to those sales.
Exempt examples include:
- Insurance
- Most financial services, such as loans and bank charges
- Education and training from an eligible body
- Health services from a registered doctor or dentist
- Betting and gaming
- Postage stamps
Zero rated is not the same as exempt
This difference between zero rated and exempt matters for any VAT registered business.
A zero rated sale is still inside the VAT system. The business charges 0%, but it can still claim back the VAT it paid on its own costs.
An exempt sale is outside the system. The business charges no VAT, and it usually cannot claim back the VAT on costs tied to that sale.
So two businesses can both charge a customer no VAT, yet one gets money back from HMRC and the other does not.
Out of scope items
Some things are outside VAT entirely. These are called out of scope. They include wages paid to staff, dividends paid to shareholders, and statutory fees set by law. You do not charge VAT on these, and they do not go on a VAT return as sales.
How to work out VAT at each rate
To add VAT, multiply the net price by one plus the rate.
- Standard rate: net price times 1.2
- Reduced rate: net price times 1.05
To remove VAT, divide the gross price by the same figure.
- Standard rate: gross price divided by 1.2
- Reduced rate: gross price divided by 1.05
You can run any figure through the VAT calculator and switch the rate in one tap.
VAT on common items
A quick guide to the rate on things people ask about most.
| Item | VAT rate |
|---|---|
| Hot takeaway food | 20% |
| Cold sandwich to take away | 0% |
| Children’s shoes | 0% |
| Children’s car seat | 5% |
| Home gas and electricity | 5% |
| Books and ebooks | 0% |
| Restaurant meal | 20% |
| Bank charges | Exempt |
Frequently asked questions
What is the current UK VAT rate? The standard rate is 20%. It has been 20% since 4 January 2011. A reduced rate of 5% and a zero rate of 0% apply to certain goods and services.
What is the reduced rate of VAT? The reduced rate is 5%. It applies to things like home gas and electricity, children’s car seats and some home improvements.
What goods are zero rated? Most food, books, newspapers, children’s clothes and shoes, prescription medicines and public transport are zero rated at 0%.
What is the difference between zero rated and exempt? Zero rated sales sit inside the VAT system, so the business can reclaim VAT on costs. Exempt sales sit outside it, so the business usually cannot.
Is there VAT on food in the UK? Most food from shops is zero rated. Hot takeaway food, restaurant meals, sweets, crisps and alcohol are charged at the standard 20% rate.
Does the UK have a 2026 VAT rate change? No. The standard rate stays at 20% and the reduced and zero rates are unchanged for 2026.