This is a freeview 'At a glance' guide to the VAT rate and VAT fractions.

What is the VAT rate? What is the VAT fraction? How do I calculate VAT?

The standard rate of VAT is:

  • 20% from 4/1/2011
  • 17.5% from 1/1/2010 to 3/1/2011
  • 15% from 1/12/2008 to 31/12/2009
  • 17.5% up until 30/11/2008

The reduced rate of VAT is:

  • 5%

Temporary reduced rate for the hospitality and tourism sector:

  • 5% from 15/7/2020 to 30/9/2021
  • 12.5% from 1/10/2021 to 31/3/2022

See COVID-19: Reduced rate VAT

The zero rate of VAT:

  • 0%

The rate for exempt supplies:

  • No VAT is charged

The rate of VAT charged depends on:

1. The type of supply: whether it is a supply of Goods or services.

2. The place of supply: which is determined by:

a) Working out whether the supply is from business to business or business to customer. 

b) Deciding whether it is within the general rules or covered by any exemptions.

See Place of supply: services and Place of supply: goods

3. The nature of the supply: whether the supply is:

  • Outside the scope of VAT.
  • Exempt.
  • Zero rated.
  • Reduced rated.
  • Standard rated.

See HMRC rates on different goods and services

VAT fraction

If you need the VAT fraction to work out the VAT on a gross (VAT inclusive total).

VAT rate

Fraction

Example

5%

1/21

£100 + VAT @ 5% = £105

So, 

£105 x 1/21 = £5

15%

3/23

£100 + VAT @ 15% = £115

So,

£115 x 3/23 = £15

17.5%

7/47

£100 + VAT @17.5% = £117.50

So,

£117.50 x 7/47 = £17.5

20% 1/6

£100 + VAT @20% = £120

So,

£120/6= £20

 

Useful guides on this topic

Goods or services for VAT?
What are goods and what are services for VAT? The answer may have an impact on the time of supply, the place of supply and in some cases the rate of the supply. The answer is not always as straightforward as it may seem.

Place of supply: Goods
VAT on goods is determined by the place of supply (POS); whether they are UK based supplies, imports or exports.

Place of supply: Services
The place of supply (POS) of a service determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.


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Comments (1)

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This comment was minimized by the moderator on the site

Hi RM

It would be handy to have the temporary 12.5% fraction on here for the hospitality industry. I've calculated it as 1/9.

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