What is VAT?

Value Added Tax (VAT) is a tax added to products and services by businesses who are VAT registered.

VAT registration is mandatory for UK businesses whose VAT taxable turnover is more than a certain amount.

It’s also possible to register for VAT voluntarily.

There are three levels of VAT:

  • standard (20%) for most products and services
  • reduced (5%) for some things, such as kids car seats and home energy
  • zero (0%) for items such as newspapers, children’s clothes and crash helmets.

VAT thresholds and rates are sometimes revised by the UK government.

Small business guide to VAT

Managing VAT can be a pain for many small businesses - but it doesn't have to be! Everything you need to register and submit VAT and staying compliant is right here.

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