Reference guide

UK VAT Rates

The UK has three VAT rates that apply to different categories of goods and services, plus a separate category of items that are exempt from VAT entirely. This page lists each rate, when it applies, and worked examples of the goods and services that fall into each category, so you can pick the right rate before using the VAT calculator. None of the rates below change how the calculator works, they're simply the percentage you select before entering an amount and every calculation runs locally in your own browser.

Standard rate: 20%

The standard rate of 20% applies to most goods and services sold in the UK, and is the default most businesses charge unless a specific reduced, zero or exempt category applies. It has been in place since 4 January 2011, when it rose from 17.5%.

Most retail goods (electronics, furniture, clothing for adults, cosmetics)
Most professional services (consulting, accountancy, legal work)
Alcohol and confectionery
Adult clothing and footwear
Most home renovation and repair work (as opposed to new-build construction, which is zero-rated)

Reduced rate: 5%

The 5% reduced rate applies to a specific, defined list of goods and services, most commonly domestic energy. If you're not sure whether an item qualifies, HMRC's own guidance is the authoritative source, this list covers the most common cases people search for.

Domestic gas and electricity (household energy bills)
Children's car seats and booster seats
Certain energy-saving materials installed in homes (insulation, solar panels, heat pumps)
Mobility aids for older people, when installed in the home of someone over 60
Smoking cessation products (nicotine patches and gum)

Zero rate: 0%

Zero-rated items are technically still within the VAT system (a business selling them can still reclaim VAT on its own purchases), but the rate charged to the customer is nil. This is a distinct legal category from being exempt, see below, even though the price a customer pays is unaffected either way.

Most food and drink (with some exceptions, like restaurant meals, hot takeaway food, confectionery, crisps and alcoholic drinks, which are standard-rated)
Books, newspapers and magazines (printed; most e-books are also zero-rated as of 2020)
Children's clothing and footwear (sized for children under 14)
Public transport fares (bus, train, coach, most domestic flights)
New residential construction (building a new home from scratch, as opposed to renovating an existing one)

VAT-exempt items (a separate category from zero-rated)

A small number of goods and services are exempt from VAT altogether, meaning they sit outside the VAT system entirely rather than being charged at 0%. The practical result for a customer is the same either way, no VAT is added, but a business selling exempt items generally cannot reclaim VAT on related purchases, unlike a business selling zero-rated items.

Most financial services and insurance
Most education and vocational training provided by an eligible body
Most healthcare provided by registered health professionals
Postage stamps and postal services provided by Royal Mail's universal service
Subscriptions to most membership organisations and charities (in specific circumstances)

How to use these rates with the VAT calculator

Once you know which category your item falls into, select the matching rate (20%, 5% or 0%) in the VAT calculator on the homepage, choose whether you're adding VAT to a net price, removing VAT from a gross price, or finding the VAT included in a price you've already paid, and enter your amount. If you need a rate that isn't one of the three UK statutory rates, for example an older historical rate like 17.5%, or a different country's rate, the calculator's custom rate option accepts any percentage from 0% to 100%.

If you need the exact formula rather than the calculator, see how to calculate VAT by hand for the full step-by-step method at any of these rates.

Every figure you enter is processed locally in your browser, nothing is sent to a server, see the privacy policy for the full details.

A quick worked example at each rate

Seeing the same £200 net price treated at all three rates side by side makes the difference concrete. At the standard 20% rate, £200 net becomes £240 gross, £40 of which is VAT. At the 5% reduced rate, the same £200 net becomes £210 gross, £10 of which is VAT. At the 0% zero rate, the net and gross prices are identical, £200 either way, because no VAT is added at all. The category the item falls into, not the price itself, is what determines which of these three outcomes applies.

Frequently asked questions

What is the standard VAT rate in the UK right now?

20%, in place since 4 January 2011. It applies to most goods and services unless a specific reduced-rate, zero-rate or exempt category applies instead.

What items are charged at the 5% reduced VAT rate?

Domestic gas and electricity, children's car seats, certain energy-saving home improvements like insulation and heat pumps, and mobility aids installed for people over 60, among a small number of other defined categories.

What is the difference between zero-rated and VAT-exempt?

Both result in no VAT being charged to the customer, but they're legally distinct. Zero-rated items (most food, books, children's clothing) are still within the VAT system at a 0% rate, so a business can reclaim VAT on related purchases. Exempt items (most insurance, most financial services) sit outside the VAT system entirely, and a business generally cannot reclaim VAT on related purchases.

Is food always zero-rated for VAT?

Most food and drink for home consumption is zero-rated, but there are exceptions charged at the standard 20% rate: restaurant meals, hot takeaway food, confectionery, crisps and savoury snacks, and alcoholic drinks.

Which VAT rate should I select in the calculator?

Select 20% for most goods and services, 5% for domestic energy and the other reduced-rate items listed above, or 0% for zero-rated items like most food, books and children's clothing. If your situation uses a different rate entirely, use the calculator's custom rate field.

Work out VAT at any of these rates

Pick the rate that applies and see the net, VAT and gross amounts instantly.

Open the VAT calculator

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