Value Added Tax (VAT) Guide: Registration, Rates and Reliefs

Value Added Tax (VAT) is one of the UK's most significant business taxes, affecting businesses of all sizes across a wide range of sectors. Whether you are approaching the registration threshold, already VAT registered, or trading internationally, understanding your VAT obligations is essential. The rules can be complex, with different rates applying to different goods and services and special rules for overseas transactions. This short guide outlines the key VAT rates, registration requirements and reliefs available, helping you understand the basics and identify when professional advice may be needed.

Value Added Tax (VAT)

 Most goods and services are subject to VAT in the UK. If your sales exceed the VAT registration threshold in a twelve-month period, you must register for VAT and charge VAT to your customers. If you supply goods or services overseas you may need to comply with VAT rules in the country where your supply is being made. International VAT rules are complex, so please speak to us so we can help you remain compliant in this area. 

For VAT purposes, the provision of goods and services can either be taxable supplies or exempt supplies. You must charge your customers VAT on taxable supplies, at a standard, reduced or zero rate, based on the nature of the supply. You do not charge VAT on exempt supplies. 

If you make taxable supplies, you are entitled to register for VAT and reclaim the VAT that you are charged on your purchases. Unless you satisfy certain conditions, you are not allowed to reclaim the VAT you are charged on the purchases you use to make exempt supplies.

You may be eligible for simplification schemes, such as cash accounting, annual accounting and the flat rate scheme. Please speak to us if you need VAT advice; we can help you determine the correct VAT treatment of your supplies and make the VAT compliance process easier for you to manage.

You can download our full, free tax rate guide here: Ritchie Phillips Private Client Tax Rate Guide 2026/27

This guide provides an overview of the key UK VAT rules, registration requirements, rates and reliefs. It is intended as a general guide only and does not cover every aspect of VAT legislation or every circumstance that may affect your business. VAT is a complex area of tax, particularly where exemptions, partial exemption, international trade or specialist sectors are involved. No action should be taken based on this guide alone. Please contact us before making any decisions or if you would like tailored advice on the VAT treatment of your business activities.