UK VAT Rates 2026/27

Value Added Tax (VAT) is a consumption tax charged on most goods and services sold in the UK. There are three rates:

• Standard rate (20%) — applies to most goods and services
• Reduced rate (5%) — applies to domestic energy, children's car seats, sanitary products
• Zero rate (0%) — applies to most food, children's clothing, books and newspapers

How to Add VAT

To add 20% VAT to a net price: multiply the net amount by 1.20. For 5% VAT, multiply by 1.05.

How to Remove VAT

To remove 20% VAT from a gross price: divide by 1.20 (or multiply by 5/6). The VAT fraction for 20% is 1/6 of the gross amount. For 5% VAT, divide by 1.05.

VAT Registration Threshold

Businesses must register for VAT when their taxable turnover exceeds £90,000 in any rolling 12-month period (2026/27 threshold). Once registered, you must charge VAT on applicable sales and can reclaim VAT paid on business purchases.