Tax Rates

There are three rates of VAT:

1. 20% – the standard rate of VAT, applying to any sales of standard-rated goods or services
2. 5% – for certain supplies of fuel and power and sanitary goods
3. Zero-rated – the four main areas of zero-rated goods are:
   • Food and agriculture (but excluding pet food and most catering)
   • Printed matter, including books and newspapers
   • Young children’s clothing and footwear
   • Passenger transport (but excluding hire cars, taxis and parking)

Any VAT charged by the business, whether at 20% or 5% is known as output VAT and the total charged or collected in the VAT quarter is payable to H M Revenue & Customs.