Consumption/VAT/Sales Tax in the U.K.

Overview by
Nature of the Tax
Value Added Tax (VAT)
Standard Rate
Reduced Tax Rate
United Kingdoms apply a reduced VAT rate of 5% on certain categories of goods and services, including children’s car seats or social housing. Water supplies, pharmaceutical products, medical equipment for disabled persons, books, newspapers, social services… are exempted of VAT.
Exclusion From Taxation
Even if you only supply goods that are zero-rated - for example books, newspapers, young children’s clothing and shoes or food (although not food sold in cafes, bars etc) you still have to tell HM Revenue & Customs first and apply to be ’exempt from registration’. Check its website to see exemptions and lists of goods and services charged at 5% or zero.

There are also some specific zero-rated reliefs and exemptions.

Method of Calculation, Declaration and Settlement
The VAT return details how much is payable and how you have calculated it. (See how to complete a VAT return.) Your completed VAT return and payment of whatever tax is due is usually one month after the end of your tax period. You can of course submit the VAT return online and arrange for an electronic payment.
Other Consumption Taxes
All informations are available on the website HM revenue and customs.

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Experts Views (1)
  • EU VAT Guide

    With 27 EU Member States, each with their own VAT legislation to consider, VAT can be a time consuming and confusing task for international business.

    Accordance on 24 Jan 2012 related to Consumption/VAT/Sales Tax in the United Kingdom

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