Difference between VAT Rates in UK

Value-added tax (VAT) classification of food in the United Kingdom:

Standard Rated (20% VAT):

 

• • Most foods, including takeaway foods, confectionery, sweets, snacks, and soft drinks

• • Hot foods and hot drinks, including alcoholic drinks, served in cafes, restaurants, and pubs
    
    

Zero Rated (0% VAT):

 

• • Most foodstuffs for human consumption, including fresh and frozen foods, fruit and vegetables, eggs, milk, bread, and pasta

• • Food intended for consumption by animals, such as pet food
    
    

Exempt (0% VAT):

 

• • Food donations to charity

• • Food supplies to hospitals, care homes, schools, and prisons

• • Food sold in canteens to employees of the canteen operator
    
    

Note: VAT classification of food may vary depending on how it is supplied and the type of business making the supply. This information is for general guidance only and may not apply to all situations.

Here is a more comprehensive list of VAT classification for goods and services in the United Kingdom:

Standard Rated (20% VAT):

 

• • Most goods and services, including telephone and internet services, insurance, professional services (e.g. legal, accounting, and advertising), and construction services

• • Some goods, such as energy-saving materials, sports equipment, and bicycles, are eligible for a reduced rate of 5% VAT

• • Hot takeaway food and hot drinks, including alcoholic drinks served in cafes, restaurants, and pubs

• • Luxury goods, such as jewellery, furs, and cosmetics
    
    

Zero Rated (0% VAT):

 

• • Most foodstuffs for human consumption, including fresh and frozen foods, fruit and vegetables, eggs, milk, bread, and pasta

• • Food intended for consumption by animals, such as pet food

• • Books, newspapers, and periodicals

• • Children’s car seats and some medical equipment
    
    

Exempt (0% VAT):

 

• • Financial services, such as banking, insurance, and investment services

• • Education, including courses, tuition fees, and exam fees

• • Renting of commercial property

• • Certain public transport services, such as bus and train services

• • Food donations to charity

• • Food supplies to hospitals, care homes, schools, and prisons

• • Food sold in canteens to employees of the canteen operator

• • Residential property rental and sales

• • Health and welfare services, such as doctor and dental services
    
    

Note: VAT classification of goods and services may vary depending on how they are supplied and the type of business making the supply. This information is for general guidance only and may not apply to all situations.

At Finanche we advise on and prepare VATs for various businesses and we will be able to give you comprehensive advice on what VAT applies to your circumstances. Email as at finance@finanche.co.uk and one of our accountants will be in touch.