Online VAT Calculator

Last updated: December 06, 2022

Use our online VAT calculator to calculate VAT Inclusive and VAT Exclusive.

What is VAT

Value-added taxes, also known as goods and services taxes in some countries, are incremental taxes. Each stage of production, distribution, or sale of a product or service is subject to taxation. 

What is the UK rate?

In the UK, 20% VAT is the standard rate. At 5% it’s reduced. The standard rate of 20% applies to most goods and services. This rate should be charged unless reduced or zero-rated goods or services are involved.

Products & Services VAT Rates in the UK

Food VAT Rates in the UK

Most food within the UK is zero-rated, which means you do not have to pay VAT on it. This information comes from (official site) The following foods and drinks are zero-rated:

Food products that are VAT exempt in the UK

Biscuits	Cereals Fish and live Fish	poultry, Eggs & meat
Jaffa Cakes and chocolate teacakes	Cooking oil	Nuts & pulses
Pita bread, baps, rolls, and baps	Ready meals that are chilled or frozen (convenience foods)	Water
Food in cans and freezers without ice cream	Salt	Milk, butter, cheese
Sandwiches	Tea, coffee & cocoa	vegetables & Fruit

There are, however, some food items and drinks that are subject to standard VAT rates, including:

Food products that are not VAT-exempt in the UK

Biscuits with chocolate only	Confectionery/sweets	Juices & cold drinks (not milk)
Alcoholic drinks	Chocolate	Ice cream
Cereal bars	Restaurants, cafes, hotels, etc.) Supplies of food and drinks for consumption on the premises (at restaurants, cafes, hotels, etc.)	Potato crisps
Drinks containing carbon dioxide and bottled water (including mineral water)	You can order hot food & drinks for takeout (such as burgers, hot dogs, toasted sandwiches, etc.)	Nuts

Zero-rated items for UK VAT

The following products are all zero-rated for UK VAT.

Any of these purchases will not be subject to VAT, so ask your supplier or retailer if you’re being charged VAT.

Aircraft (for sale/charter)	Helmets for bicycles and motorcycles	Chocolate-free biscuits
Fares for public transportation (buses, trains, and tubes)	Culinary salt	Cold sandwiches
Providing disability services	Jaffa Cakes (including chocolate teacakes)	Foods in cans and frozen (without ice cream)
(Raw for human consumption) Nuts & pulses	Medicines on prescription	Industrial protective boots & helmets
E-books, maps, and charts	Pita bread, bread rolls, baps, and baps	Pamphlets, brochures, and leaflets
Sewage systems for domestic and industrial use	Ten or more passengers must be transported by vehicle, boat, or aircraft	Foods that are chilled or frozen and are ready to eat
Construction of ships (15 tonnes or more)	Tea, coffee & cocoa	Water (household)
Cereals	Building and selling new homes	Cooking oil
Journals, magazines, and newspapers	Human consumption of live animals	Vegetables and fruits
Poultry & meat	Cheese, milk, and butter	Disabled people’s equipment (including blind and partially sighted equipment)
The sale of donated goods at charity shops	Live fish (included)	Eggs

UK VAT Exempt Items & Services

If sold to a public institution, antiques, works of art, or other similar items	Insurance for funeral plans	Subscriptions to membership
A museum, an exhibition of art, a zoo, or a performance that is operated by a government agency is considered a cultural event.	The provision of financial support (such as money transactions, loans, credits, savings, deposits, shares, and bonds)	Treatment & care for medical conditions
Cremation or burial (human)	The gambling industry (betting, gaming, bingo, lottery)	Postage stamps
Selling, leasing, and letting commercial land and buildings	Insurance	TV license
Training and Education	Services related to health (doctor, dentist, optician, pharmacist, etc.)	Physical education and sports activities

VAT-registered businesses are responsible for collecting VAT on behalf of HMRC. A VAT number is assigned to each registered company after registration. The same companies are also eligible for VAT reimbursement on relevant purchases.

As a condition of its entry into the European Economic Community, the United Kingdom introduced the value-added tax in 1973 to replace Purchase Tax and Selective Employment Tax. More information about VAT can be found on Wikipedia. Furthermore, you can check how much is vat below:

VAT rate over time for the UK

How is VAT calculated in UK?

Reduced-rate ESP (5% goods) = $105 after deducting the ESP. At a 20% VAT rate, sales of goods would be $22,395. Using the 20% goods as an example, divide by six to calculate the VAT due on them = £3,732.50. Use a ratio of 21 to determine the VAT due on the 5% goods, which is $5. This page includes a VAT reverse calculator.

VAT Historical Rates

The UK implemented a 10% value-added tax on April 1st, 1973.

The VAT rate has been reduced to 8%, but the fuel tax has been raised to 25% on July 29th, 1974

The rate of value-added tax has been raised to 15% on June 18th, 1979

VAT has been raised to 17.5% on April 1st, 1991

Reduced sales tax rate by 15% on December 1st, 2008

The standard rate was raised to 17.5% and the reduced rate was introduced at 7% on January 1st, 2010

Standard VAT rates are raised to the current 20%, with the reduced rate being 5% on January 4th, 2011

VAT Calculation and Examples of VAT Inclusive and VAT Exclusive

You can calculate VAT online in either direction by following these simple steps.

VAT Facts

This page contains facts about VAT that you may not be aware of.

During the introduction of VAT, it was described as a “simple tax”, but its complexity has caused it to be compared to a “fiscal theme park where reality is suspended and distorted.” Sound exaggerated? These ten odd facts about VAT might be of interest to you…

1. According to their decorations, gingerbread men can be classified differently. There is no VAT on two chocolate spots for eyes on a gingerbread man, but any other chocolate decoration is liable for VAT.
2. Unlike stolen goods, stolen cash is not subject to VAT when stolen from a shop.
3. However, counterfeit cash is exempt from VAT while sales of counterfeit goods are.
4. Caviar, lap dances, and labrador food are not considered luxuries, but orange squash, petrol, ice cream, and poodle food are.
5. Unlike honey bees, bumblebees are subject to VAT.
6. When you add caramel to chocolate-covered shortbread, it becomes Millionaire’s shortbread, which is not subject to VAT.
7. The VAT law refers to ferrets as pets; rabbits are not.
8. When nuts are sold still in their shells, they are zero-rated, whereas that outside of their shells is subject to tax.
9. Ebooks are not exempt from VAT, but physical publications are.
10. I have to mention the famous Jaffa cake debate too, just recently resolved by a majority of Upper Tribunal judges who determined that a Jaffa cake was in fact a cake, meaning the price was taxed differently from what it would be if it were a biscuit.

Frequently Asked VAT Questions & Answers

The following is a collection of information on value-added tax in the form of questions and answers.