Standard rate 20% applies to most goods and services.

Reduced rate 5% applies to some goods and services, for example children car seats and home energy.

Zero rate 0% applies to zero-rated goods and services, for example most food and children clothes.

Taxes

United Kingdom — Tax: Vat

The UK has a 20% standard VAT rate, a 5% reduced rate and a 0% zero rate.

VerifiedGovernment / official sourceGOV.UK — VAT ratesLast reviewed: 2026-10-23

Why this matters

Relocating individuals should be aware of the UK's VAT system to understand their tax obligations and potential implications for business or property ownership.

Key facts

Standard rate 20% applies to most goods and services.
Reduced rate 5% applies to some goods and services, for example children car seats and home energy.
Zero rate 0% applies to zero-rated goods and services, for example most food and children clothes.

Steps

Registering for VAT — Businesses must register for VAT with HMRC if their turnover exceeds the registration threshold. The registration process typically takes 2-4 weeks. Business owners must maintain accurate records of their VAT-registered transactions to meet HMRC's requirements.

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