What is the VAT rate? What is the VAT fraction for VAT at 5% or 12.5% or 20%? How do I calculate VAT?

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

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 is:

  • 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 exception.

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

Add VAT to net price:

£100 + VAT @ 5% = £105

Work out VAT from gross price:

£105 x 1/21 = £5

12.5% 1/9

Add VAT to net price:

£100 + VAT @ 12.5% = £112.50

Work out VAT from gross price:

£112.50 x 1/9 = £12.50

15%

3/23

Add VAT to net price:

£100 + VAT @ 15% = £115

Work out VAT from gross price:

£115 x 3/23 = £15

17.5%

7/47

Add VAT to net price:

£100 + VAT @17.5% = £117.50

Work out VAT from gross price:

£117.50 x 7/47 = £17.50

20% 1/6

Add VAT to net price:

£100 + VAT @20% = £120

Work out VAT from gross price:

£120/6= £20

 

Useful guides on this topic

Registering for VAT
When should a business register for and charge VAT? What are the VAT registration thresholds? What penalties might HMRC issue for late notification of registration? When do you need to file a VAT return?

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
The place of supply (POS) of goods determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.

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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