UK VAT Rate 2026: Standard (20%) & Reduced (5%) — Quick Guide

UK VAT Rate (2026): Current Standard & Reduced Rates

A practical summary of the UK’s current VAT rates used in 2026 (standard and reduced), plus a quick reminder on zero-rated vs exempt.

Current headline VAT rates (used in 2026 unless changed by legislation)

VAT category	Rate	What it generally applies to
Standard rate	20%	Most goods and services (default rate unless a specific relief applies).
Reduced rate	5%	A limited list of goods/services (see examples below).
Zero rate	0%	Supplies that remain taxable but at 0% (conditions apply).
Exempt	N/A	No VAT charged; input VAT recovery is restricted (partial exemption rules may apply).
Outside the scope	N/A	Not treated as a VAT supply (often no output VAT; input VAT recovery depends on linkage to taxable business activities).

Tip: If you tell me what you sell (goods/services, B2B/B2C, and where customers are located), I can help you map the likely VAT liability category and what evidence you typically need to support it.

Reduced rate (5%) — common examples

• Domestic/residential fuel and power often fall into the 5% category, subject to conditions.
• Energy-saving materials installed in dwellings or qualifying residential buildings can qualify in certain situations (specific rules and exclusions apply).

Always confirm the exact product/service and the conditions for reduced rating before applying 5%.

Zero rate (0%) — common examples

• Exports can be zero-rated, but only if conditions and evidence requirements are met.
• Printed publications are often zero-rated, with exceptions for certain items.
• Children’s clothing and footwear are commonly zero-rated (subject to classification rules).

Zero-rated vs exempt: why the difference matters

A zero-rated supply is still a taxable supply (VAT rate is 0%), which often supports input VAT recovery. An exempt supply is generally not taxable, and input VAT recovery is commonly restricted (fully or partially).

This distinction can be crucial for pricing, VAT returns, and whether VAT on costs can be reclaimed.

Summary: UK VAT rates to use for 2026

• Standard VAT rate: 20%
• Reduced VAT rate: 5% (limited categories, conditions apply)
• Zero rate: 0% for specified supplies (conditions apply)
• Exempt: no VAT charged; input VAT recovery often restricted