Navigation path


Generic Tax Name VAT
Tax name in the national language Value added tax
Tax name in English Value added tax
Member State UK-United Kingdom
Tax in force since 1973/04/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

Value Added Tax Act 1994, as amended by subsequent finance acts.

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments
 
Geographical Scope
Territories excluded (article 6 2006/112/EC)

UK



Comments
 
Taxpayers
Included taxable persons doing occasional transactions (article 12 2006/112/EC)


Comments

Special scheme for SMEs (article 281 2006/112/EC and following) None
Exemption
Graduated relief
Turnover threshold: 81,000.00  EUR/Natcur
Comments

VAT Registration Threshold with effect from 01 April 2015.

The UK also applies a Flat Rate Scheme for small businesses under Article 281. The scheme is limited to businesses with a VAT exclusive turnover of up to £150,000.


Common Flat-rate scheme for farmers (article 295 2006/112/EC and following) None
All categories
Some categories
Flat rate compensation percentage (general):
4.00 %
Flat rate compensation percentage for forestry:
4.00 %
Flat rate compensation percentage for fisheries:
4.00 %
Comments

There is a special scheme on the following





Comments

Special derogations to continue to tax (annex X)




Comments

Special derogations to continue to exempt (annex X)













Comments


Comments
  • Anyone carrying on a business with a taxable turnover (including zero‑rated goods and services) of more than GBP 81,000 per year (from 1 April 2015).
  • Anyone carrying on a business with a taxable turnover (including zero-rated goods and services) not exceeding the VAT registration threshold above who voluntarily registers for VAT.
 
Tax object and basis of assessment
The following items are regarded as supply of goods and hence taxed under VAT (article 14 - 15 2006/112/EC)




Comments

Only if interest in or over immoveable property is over 21 years except Scotland which is 20 years.


The following items are regarded as supply of goods and hence taxed under VAT (article 18 2006/112/EC)



Comments

By derogation to article 26 paragraph 1, the following item(s) are not regarded as supply of services and hence not subject to VAT (article 26(2) 2006/112/EC)


Comments

By application of article 27 of 2006/112/EC, the following item is treated as supply of services The supply by a taxable person of a service for the purposes of his business, where the VAT on such a service, were it applied by another taxable person, would not be wholly deductible
Comments


Comments
  • Taxable supply of goods or services made in the UK by a taxable person in the course or furtherance of any business.
  • Imported goods and certain services provided in the United Kingdom by overseas businesses.

 

Basis of assessment:

  • The consideration received for the supply of goods or services (excluding the tax itself).
  • On imports, the customs value plus any duties special surcharges or levies, and any incidental expenses in respect of delivery to the first destination.
  • On services provided by overseas businesses, the consideration paid for the supply of services.
 
Deductions, Allowances, Credits, Exemptions
Exempted sectors*

--


Special Measures derogating from the normal VAT rules in accordance with Article 395 of Directive 2006/112/EC*

--



Comments

Exemptions:

(Without deduction of tax paid at earlier stages).

Land and property transactions (including rents but excluding the sale of new commercial and industrial buildings and civil engineering works; hotel, holiday and similar accommodation; parking and mooring facilities, and some other minor categories); insurance; postal services; betting and gaming (other than by means of gaming machines); sports; cultural services; disposal of certain works of art; financial transactions; education; health and welfare services; burial and cremation; membership services of trade unions, professional and other public interest bodies; one off fund raising events held by charities and other eligible bodies; and investment gold.

 
Rate(s) Structure
Standard VAT rate Rate: 20.00 %
Comments

Reduced rate 1

(article 98 of Directive - Annex III of Directive)
Rate: 5.00 % on full or part of the following items

Article 98(2) 2006/112/EC

Foodstuffs (including beverages but excluding alcoholic beverages) for human and animal consumption; live animals, seeds, plants and ingredients normally intended for use in the preparation of foodstuffs; products normally used to supplement foodstuffs or as a substitute for foodstuffs
Supply of water
Pharmaceutical products of a kind normally used for health care, prevention of illness and as treatment for medical and veterinary purposes, including products used for contraception and sanitary protection
Medical equipment, aids and other appliances normally intended to alleviate or treat disability, for the exclusive personal use of the disabled, including the repair of such goods, and supply of children's car seats
Transport of passengers and their accompanying luggage
Supply, including on loan by libraries, of books on all physical means of support (including brochures, leaflets and similar printed matter, children's picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts), newspapers and periodicals, other than material wholly or predominantly devoted to advertising
Admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities
Reception of radio and television broadcasting services
Supply of services by writers, composers and performing artists, or of the royalties due to them
Provision, construction, renovation and alteration of housing, as part of a social policy
The renovation and repair of private dwellings, excluding materials which account for a significant part of the value of the service supplied
Window cleaning and cleaning in private households
Supply of goods and services of a kind normally intended for use in agricultural production but excluding capital goods such as machinery or buildings
Accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites
Restaurant and catering services, it being possible to exclude the supply of (alcoholic and/or non-alcoholic) beverages
Admission to sporting events
Use of sporting facilities
Supply of goods and services by organisations recognised as being devoted to social wellbeing by Member States and engaged in welfare or social security work, in so far as those transactions are not exempt pursuant to Articles 132, 135 and 136
Supply of services by undertakers and cremation services, and the supply of goods related thereto
Provision of medical and dental care and thermal treatment in so far as those services are not exempt pursuant to points (b) to (e) of Article 132(1)
Supply of services provided in connection with street cleaning, refuse collection and waste treatment, other than the supply of such services by bodies referred to in Article 13
Minor repairs of bicycles
Minor repairs of shoes and leather goods
Minor repairs of clothing and household linen (including mending and alteration)
Domestic care services such as home help and care of the young, elderly, sick or disabled
Hairdressing

Article 102 2006/112/EC

Supply of natural gas
Supply of electricity
Supply of district heating

Article 103(1) 2006/112/EC

Pictures, collages and similar decorative plaques, paintings and drawings, executed entirely by hand by the artist, other than plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, hand-decorated manufactured articles, theatrical scenery, studio back cloths or the like of painted canvas (CN code 9701)
Original engravings, prints and lithographs, being impressions produced in the limited numbers directly in black and white or in colour of one or of several plates executed entirely by hand by the artist, irrespective of the process or of the material employed, but not including any mechanical or photomechanical process (CN code 9702 00 00)
Original sculptures and statuary, in any material, provided that they are executed entirely by the artists.
Sculpture casts the production of which is limited to eight copies and supervised by the artist or his successors in title (CN code 9703 00 00); on an exceptional basis, in cases determined by the Member States, the limit of eight copies may be exceeded for statuary casts produced before 1 January 1989
Tapestries (CN code 5805 00 00) and wall textiles (CN code 6304 00 00) made by hand from original designs provided by artists, provided that there are not more than eight copies of each
Individual pieces of ceramics executed entirely by the artist and signed by him
Enamels on copper, executed entirely by hand, limited to eight numbered copies bearing the signature of the artist or the studio, excluding articles of jewellery and goldsmith's and silversmith's wares
Photographs taken by the artist, printed by him or under his supervision, signed and numbered and limited to 30 copies, all sizes and mounts included
Postage or revenue stamps, postmarks, first-day covers, pre-stamped stationery and the like, used, or if unused not current and not intended to be current (CN code 9704 00 00)
Collections and collector's pieces of zoological, botanical, mineralogical, ethnographic or numismatic interest (CN code 9705 00 00)
Goods, other than works of art or collector's items, which are more than 100 years old (CN code 9706 00 00)
Comments

Reduced rate of 5 % applies to: domestic and charity fuel and power (by derogation under Article 113); the installation of energy saving materials in all homes and certain grant-funded installation of heating equipment; women's sanitary protection; children's car seats; certain residential conversions, renovation and alterations; certain supplies of welfare advice and contraceptive products.

The Isle of Man applies all the reduced rates provided for by the UK, but also applies reduced rates for: hotels and similar accommodation; and repairs and refurbishment to domestic properties.

NB The ticks in the list above against ‘hotel accommodation’, and ‘repairs to private dwellings’, are in respect of the Isle of Man ONLY.



Special reduced VAT rate for specific regions (including articles 104 and 105 2006/112/EC) Rate:
Regions
Comments

Special provisions under article 110 2006/112/EC (existing provisions prior to 1991):No

Special provisions under articles 111 2006/112/EC:No

Special provisions under articles 112 2006/112/EC:No

Special provisions under articles 113 2006/112/EC:No

Special provisions under articles 114 2006/112/EC:No

Special provisions under articles 115 2006/112/EC:No

Special provisions under articles 116 2006/112/EC:No

Special provisions under articles 117 2006/112/EC:No

Special provisions under articles 118 2006/112/EC:No

Special provisions under articles 119 2006/112/EC:No

Special provisions under articles 120 2006/112/EC:No

Special provisions under articles 121 2006/112/EC:Yes

Applies to work done on items that are subject to the zero-rate.


Special provisions under articles 122 2006/112/EC:Yes

This is restricted to wood. The UK also applies a zero rate to roots and bulbs.



Comments

The UK also applies a zero rate of VAT, inter alia, to most food (except catering and hot take-away food); young children's clothing and footwear; printed matter, including books and newspapers; the construction of new dwellings and certain communal residential and charity buildings and the approved alteration of the same categories of existing buildings which are protected buildings; water and sewerage services supplied to non-industrial customers; passenger transport (other than taxis); residential caravans and houseboats; certain supplies of gold; banknotes; certain international services; certain drugs and medicines; certain aids for the disabled; exports; commercial ship and aircraft stores; sale of donated goods by certain charities and charitable donations of certain medical and scientific equipment.

 
Tax due date

Taxable persons VAT liability is calculated and reported to the tax authority by submission of a VAT return. The deadline for payment of the VAT liability is usually the same as the deadline for the return, and is normally one calendar month and seven days after the end of the period covered by the return.

 
Tax collector

At the end of each tax period (usually three months), the taxable person must make a return of VAT due to a central VAT control unit. Taxable persons who expect their input tax regularly to exceed their output tax, for example because most of their outputs are zero‑rated, may request to make returns monthly and so obtain earlier repayments. Taxable persons with turnover up to GBP 1.35 million may choose to make annual returns paying regular instalments throughout the year and a balancing amount with a return at the year end.

 
Special features
 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d211

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 113,892.00 GBP 6.84
2011 111,440.00 GBP 6.88
2010 95,888.00 GBP 6.16
2009 79,900.00 GBP 5.38
2008 92,002.00 GBP 6.05
2007 92,025.00 GBP 6.20
2006 87,758.00 GBP 6.24
2005 83,425.00 GBP 6.27
2004 81,544.00 GBP 6.50
2003 77,343.00 GBP 6.50
2002 71,066.00 GBP 6.34
2001 67,100.00 GBP 6.29
2000 64,202.00 GBP 6.25

Comments