Understanding UK VAT Basics

Value Added Tax (VAT) is a consumption tax charged on most goods and services in the UK. This guide will help you understand the basics of VAT and how it affects your business.

What is VAT?

VAT is charged on most business transactions in the UK. It's a tax on the "value added" at each stage of production and distribution.

VAT Rates

The UK has three VAT rates:

• Standard rate (20%)
• Reduced rate (5%)
• Zero rate (0%)

When to Register

You must register for VAT when your taxable turnover exceeds £85,000 in any 12-month period.