The UK has three VAT rates: a standard rate of 20%, a reduced rate of 5%, and a zero rate of 0%. A further set of goods and services is exempt from VAT. As of 2026, the standard 20% rate applies to most goods and services, while the lower rates and the exemptions cover specific items set by HMRC. The rate you charge or pay depends on what is being sold, and you can apply any of these rates in the VAT calculator once you know which one fits.
The Standard Rate Of 20%
The standard VAT rate is 20% and applies to most goods and services sold in the UK. It is the default rate, so if an item is not specifically reduced-rated, zero-rated, or exempt, it is charged at 20%. This covers the large majority of purchases, including adult clothing, electronics, furniture, professional services, alcohol, restaurant meals, and vehicles. The standard rate has been set at 20% since 4 January 2011.
The Reduced Rate Of 5%
The reduced VAT rate is 5% and applies to a specific list of goods and services. The most common is domestic gas and electricity for household use, although energy supplied for business use is charged at the standard 20% rate. Other reduced-rate items include children’s car seats and booster seats, mobility aids for people aged 60 and over, smoking cessation products such as nicotine patches, and certain residential property conversions and renovations.
The Zero Rate Of 0%
The zero rate is 0%, so no VAT is added to the price, yet the sale still sits inside the VAT system. Zero-rated goods include most food bought from shops, children’s clothing and footwear, books, newspapers and magazines, public transport fares, prescription medicines, and sanitary products. The installation of energy-saving materials in homes, such as insulation and solar panels, is also zero-rated until 31 March 2027, after which it returns to the 5% reduced rate.
VAT-Exempt Goods And Services
Some supplies are exempt from VAT, which is not the same as being zero-rated. Exempt goods and services sit outside the VAT system altogether, so no VAT is charged and the supplier cannot reclaim VAT on related costs. Common exempt supplies include insurance, financial services such as banking, education provided by eligible bodies, health services from registered practitioners, postage stamps, and certain land and property transactions. The way VAT is charged, reclaimed, and passed to HMRC is covered in what VAT is and how it works.
What VAT Rate Applies To Common Goods And Services
The table below shows the VAT rate on everyday items. For anything not listed, HMRC treats the standard 20% rate as the default unless the item is specifically reduced-rated, zero-rated, or exempt.
| Item | VAT rate |
|---|---|
| Most goods and services | 20% (standard) |
| Adult clothing, electronics, furniture | 20% |
| Restaurant meals and hot takeaway food | 20% |
| Domestic gas and electricity | 5% (reduced) |
| Children’s car seats and booster seats | 5% |
| Mobility aids for people aged 60 and over | 5% |
| Most food from shops | 0% (zero) |
| Children’s clothing and footwear | 0% |
| Books, newspapers and magazines | 0% |
| Public transport fares | 0% |
| Prescription medicines | 0% |
| Sanitary products | 0% |
| Energy-saving materials fitted in homes (to 31 March 2027) | 0% |
| Insurance and financial services | Exempt |
| Postage stamps | Exempt |
| Education from eligible bodies | Exempt |
HMRC publishes the full list of VAT rates by item on GOV.UK, which is worth checking for less common goods and for the exact conditions that apply.
Zero-Rated Vs Exempt: The Difference
Zero-rated and exempt both mean no VAT is added to the price, but they work differently. Zero-rated supplies are taxable at 0%, so a VAT-registered business charges 0% and can still reclaim the VAT it pays on its own costs. Exempt supplies are outside the VAT system, so no VAT is charged and the business cannot reclaim VAT on related purchases. The distinction also affects registration: zero-rated turnover counts toward the VAT registration threshold, while exempt turnover does not.
UK VAT Rate History
The standard rate has not always been 20%. It stood at 17.5% for most of the period before 2011, was cut temporarily to 15% during the 2008 financial crisis, and returned to 17.5% in 2010 before rising to its current level.
| Period | Standard rate |
|---|---|
| 1991 to November 2008 | 17.5% |
| December 2008 to December 2009 | 15% (temporary) |
| January 2010 to January 2011 | 17.5% |
| 4 January 2011 to present | 20% |
UK VAT Rate FAQs
How much is VAT in the UK?
The standard UK VAT rate is 20% and applies to most goods and services. A reduced rate of 5% applies to items such as domestic energy, and a zero rate of 0% applies to items such as most food and children’s clothing.
What is the current standard VAT rate?
The current standard VAT rate is 20%. It has been set at 20% since 4 January 2011, when it rose from 17.5%.
Is there VAT on food?
Most food bought from shops is zero-rated at 0%, so no VAT is added. Restaurant meals and hot takeaway food are different, and are charged at the standard 20% rate.
What rate of VAT applies to domestic energy?
Gas and electricity for household use are charged at the reduced 5% rate. Energy supplied for business use is charged at the standard 20% rate.
Is there VAT on children’s clothes?
No, children’s clothing and footwear are zero-rated at 0%, so no VAT is added. Adult clothing is charged at the standard 20% rate.
What is the difference between zero-rated and exempt?
Zero-rated supplies are taxable at 0%, and a VAT-registered business can still reclaim the VAT on its costs. Exempt supplies are outside the VAT system, so no VAT is charged and the business cannot reclaim VAT on related purchases.