UK VAT 2025 — Rates, Registration, Making Tax Digital & Filing Guide
This practical guide explains UK VAT in plain English: current rates, registration thresholds, Making Tax Digital (MTD) requirements, VAT return deadlines, invoice rules, calculation examples and an interactive VAT calculator.
Last updated: 2025
Quick summary
- Standard rate: 20% (most goods & services)
- Reduced rate: 5% (certain goods & services)
- Zero-rate: 0% (e.g., most food, children's clothes, books)
- Registration threshold: £90,000 (rolling 12-month taxable turnover)
- Filing deadline: Submit and pay usually within 1 month + 7 days after period end
- MTD (Making Tax Digital): Most VAT-registered businesses must keep digital records and submit returns using compatible software.
UK VAT rates — quick table
| Rate | Percentage | Examples |
|---|---|---|
| Standard | 20% | Most goods & services (electronics, clothing for adults, catered meals) |
| Reduced | 5% | Home energy in some cases, children’s car seats, certain renovations |
| Zero-rated | 0% | Most food, children’s clothes, books, newspapers |
| Exempt / Outside scope | — | Certain financial services, insurance, some property transactions |
Who must register for VAT?
Register for VAT if your taxable supplies in the previous 12 months exceed the registration threshold (or you expect to exceed it in the next 30 days). The current rolling 12-month threshold is £90,000. Small businesses below this threshold may still choose voluntary registration for commercial reasons.
Documents / information usually required
- Business name & trading address
- Owner / director personal details (NI / passport)
- Business bank account
- Estimated turnover & accounting period
- Company registration / sole trader details
Register via: HMRC VAT registration online service.
Making Tax Digital (MTD) for VAT
HMRC requires most VAT-registered businesses to keep digital VAT records and submit VAT returns using software that is compatible with MTD. New VAT registrations are typically signed up to MTD automatically unless exempt. If you currently keep records in spreadsheets, you must move to compatible software or use bridging tools.
VAT invoicing rules — essentials
- Supplier name, address and VAT registration number (VRN)
- Invoice number and date
- Customer details where required
- Description, quantity and unit price
- Taxable amount and VAT charged at each rate (or note '0%')
- Totals including VAT
VAT return periods & deadlines
Most businesses file VAT returns every quarter. The online submission and payment are usually due one calendar month and 7 days after the end of the accounting period (e.g., period end 31 March → deadline 7 May). Some schemes (annual accounting, payment on account) change deadlines — check your VAT account.
VAT calculation examples
Example 1 — Add VAT (standard rate)
Net price: £1,000 → VAT (20%) = £200 → Total = £1,200
Example 2 — Reverse calculation (price inclusive)
Gross price: £1,200 → VAT portion = 1,200 × (20/120) = £200 → Net = £1,000
Interactive VAT calculator
Penalties & corrections (brief)
- Late registration, late filing or late payment can lead to penalties and interest.
- Penalties depend on offence type — always review HMRC notices and use voluntary disclosure where appropriate.
Useful official links
- GOV.UK — VAT rates
- GOV.UK — Submit a VAT return (deadlines & payments)
- GOV.UK — Making Tax Digital for VAT
- GOV.UK — VAT registration
Frequently Asked Questions (FAQ)
Q: What is the standard VAT rate in the UK?
A: The standard rate is 20%. There are reduced (5%) and zero (0%) rates for some supplies.
Q: When must I register for VAT?
A: If your taxable turnover in the previous 12 months exceeds £90,000 (or you expect to exceed it in the next 30 days), you must register.
Q: What is Making Tax Digital (MTD) for VAT?
A: MTD requires VAT-registered businesses to keep digital VAT records and submit returns using compatible software; most VAT-registered businesses are within scope.
Q: How often do I file VAT returns?
A: Typically quarterly. The submission & payment deadline is usually 1 month + 7 days after the VAT period end.
Q: Where can I find official HMRC guidance?
A: See the GOV.UK links above for rates, registration and MTD guidance.
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