The standard value-added tax rate in the United Kingdom is 20%.
The UK introduced VAT in 1973, replacing the earlier purchase tax. VAT is charged at successive stages of production and distribution, while businesses generally reclaim the VAT paid on their purchases. The final burden normally falls on the consumer.
The 20% rate is the standard rate, but not every item is taxed at it. Some goods and services qualify for a reduced rate of 5%, and many are zero-rated, including most basic food, books, and children’s clothing. Zero-rated supplies remain within the VAT system but carry a 0% charge.
The rate has changed over time. It was temporarily reduced to 15% in 2008 during the global financial crisis, then returned to 17.5% in 2010 before rising to 20% in 2011. VAT is administered by HM Revenue and Customs, and businesses must register when their taxable turnover passes the applicable registration threshold.